Global Agentic AI in Smart Cities Market Size, Share, Statistics Analysis Report By Offerings (Solution (Smart Ticketing, Traffic Management, Passenger Information, Connected Logistics, Others), Services (Deployment & Integration, Consulting & Training, Support & Maintenance), By Deployment (Cloud Based, On Premises), By Technology (Machine Learning & Deep Learning, Computer Vision, Natural Language Processing (NLP), Blockchain-Enabled AI, Others), By Applications (Smart Governance and Administration, Smart Transportation and Traffic Management, Energy Management and Sustainability, Public Safety and Security, Smart Healthcare and Emergency Services, Smart Infrastructure and Urban Planning, Smart Retail and Commercial Zones, Others (Smart Education and Public Libraries, etc.)), Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2025-2034
- Published date: February 2025
- Report ID: 138800
- Number of Pages: 256
- Format:
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Quick Navigation
- Report Overview
- Key Takeaways
- U.S. Market Size and Growth
- Offerings Analysis
- Deployment Analysis
- Technology Analysis
- Application Analysis
- Key Market Segments
- Driver
- Restraint
- Opportunity
- Challenge
- Emerging Trends
- Business Benefits
- Key Player Analysis
- Top Opportunities Awaiting for Players
- Recent Developments
- Report Scope
Report Overview
The Global Agentic AI in Smart Cities market size is expected to be worth around USD 58 Billion By 2034, from USD 1.88 Billion in 2024, growing at a CAGR of 40.90% during the forecast period from 2025 to 2034. In 2024, North America dominated the Agentic AI in Smart Cities market, capturing over 45.1% of the market share and generating USD 0.8 billion in revenue.
Agentic AI refers to systems capable of making autonomous decisions to achieve specific goals without human intervention. In the context of smart cities, this technology plays a crucial role by optimizing city operations and resource management. Agentic AI enables better energy and water management, improves public safety through enhanced surveillance and emergency responses, and facilitates sustainable urban development.
The market for agentic AI in smart cities is growing, driven by the increasing demand for automation and efficient resource management. As cities worldwide strive to become smarter and more sustainable, the implementation of agentic AI solutions is expanding. This market growth is fueled by the need for enhanced public safety, sustainable resource use, and improved urban planning.
By deploying AI agents capable of autonomous decision-making and learning, smart cities can optimize operations across various sectors, including transportation, healthcare, and public services, leading to more livable and efficient urban environments. The major driving factors for the adoption of agentic AI in smart cities include the urgent need for efficient resource management, the demand for enhanced public safety, and the pressures of urbanization.
Agentic AI aids in addressing these challenges by enabling more effective traffic management, energy use, and emergency responses, thus supporting sustainable urban growth. There is significant demand for agentic AI systems within the realm of smart cities, with substantial market opportunities in areas like traffic management, resource distribution, and public safety.
The ability of agentic AI to provide real-time, autonomous solutions supports the development of smarter, more responsive city infrastructures, opening up opportunities for innovation in AI-driven services and technologies. Technological advancements are continually shaping the agentic AI landscape, enhancing its capabilities and applications in smart cities.
Improvements in machine learning algorithms, data analytics, and IoT integration allow agentic AI systems to perform more complex tasks with greater accuracy and efficiency. These advancements facilitate the broader adoption and implementation of AI agents across different sectors of urban management, driving forward the evolution of smart cities.
Key Takeaways
- The Global Agentic AI in Smart Cities market is expected to be worth around USD 58 Billion by 2034, up from USD 1.88 Billion in 2024, growing at a CAGR of 40.90% during the forecast period from 2025 to 2034.
- In 2024, the Solution segment held a dominant position in the Agentic AI in Smart Cities market, capturing more than 64.2% of the market share.
- The On-Premises segment held a dominant position in the Agentic AI in Smart Cities market in 2024, capturing more than 58.4% of the market share.
- In 2024, the Machine Learning & Deep Learning segment dominated the Agentic AI in Smart Cities market, capturing more than 26.7% of the market share.
- The Smart Governance and Administration segment held a dominant position in the Agentic AI in Smart Cities market in 2024, capturing more than 23.9% of the market share.
- North America held a dominant position in the Agentic AI in Smart Cities market in 2024, capturing over 45.1% of the market share, generating USD 0.8 billion in revenue.
- The U.S. market for Agentic AI in Smart Cities is expected to reach USD 0.678 billion by 2024, growing at a CAGR of 39.2%, driven by demand for systems that improve urban efficiency, sustainability, and livability.
U.S. Market Size and Growth
The U.S. market for Agentic AI in Smart Cities is expected to grow significantly, reaching a projected value of $0.678 billion by 2024. This growth trajectory reflects a compound annual growth rate (CAGR) of 39.2%, signaling a strong surge in demand for intelligent systems that enhance the operational efficiency, sustainability, and livability of urban spaces.
The rapid growth of this market is driven by the expanding adoption of AI-driven solutions in urban infrastructure, such as traffic management, energy distribution, waste management, and public safety. Governments and municipal planners are looking to AI technologies to improve city services, optimize resource allocation, and reduce operational costs.
Agentic AI systems will enable real-time, autonomous adjustments to urban processes, boosting the efficiency of public utilities and city functions. As smart cities prioritize sustainability and advanced urban planning, the market is set for significant growth, driven by the demand for intelligent, data-driven solutions to tackle urbanization and climate change challenges.
In 2024, North America held a dominant position in the Agentic AI in Smart Cities market, capturing over 45.1% of the market share, generating USD 0.8 billion in revenue. This dominance can be attributed to a combination of advanced technological infrastructure, substantial investments in AI development, and the region’s early adoption of smart city initiatives.
North America’s leadership in AI is driven by government support for smart city initiatives and a favorable policy environment. Federal and state grants, along with regulations, promote AI solutions, while leading tech companies spearhead innovation in Agentic AI applications.
North America’s market growth is fueled by the need to tackle urban challenges like traffic congestion, pollution, and resource management. Investments in advanced AI technologies, including machine learning, computer vision, and IoT integration, further strengthen the region’s position in the global market.
Other regions, such as Europe, APAC, and Latin America, are expected to follow suit but are still in the earlier stages of adopting Agentic AI on a large scale. North America’s current infrastructure, coupled with substantial funding and development efforts, positions it as the clear leader in this fast-growing market.
Offerings Analysis
In 2024, the Solution segment held a dominant market position in the Agentic AI in Smart Cities market, capturing more than a 64.2% share. This segment’s lead is largely due to the growing demand for specific AI-driven solutions that directly address urban challenges such as traffic congestion, efficient public transportation, and logistics optimization.
Smart ticketing systems, traffic management tools, and connected logistics solutions are key to urban planning, boosting operational efficiency in cities. These solutions streamline processes, cut costs, and offer real-time data insights, all of which contribute to enhancing the quality of life in smart cities.
The success of the Solution segment is driven by the growing integration of AI with IoT infrastructure, enabling smooth communication between devices and systems in urban settings. For example, AI-powered traffic management systems use real-time data to adjust traffic signals, predict congestion, and optimize vehicle flow, reducing delays and pollution.
Furthermore, the connected logistics sector within the Solution segment is experiencing rapid growth due to the expansion of e-commerce and the rising demand for on-demand delivery services. AI-powered logistics solutions enable real-time tracking, route optimization, and efficient warehouse management, leading to faster deliveries and reduced carbon footprints.
Deployment Analysis
In 2024, the On-Premises segment held a dominant market position in the Agentic AI in Smart Cities market, capturing more than a 58.4% share. This dominance can be attributed to several key factors. First, many municipalities and government agencies prefer keeping sensitive data and critical systems within their own infrastructure for security and control reasons.
Second, On-Premises solutions offer more predictable and stable performance, as they are not reliant on external cloud services that might face outages or latency issues. In smart city applications where real-time data processing and decision making are crucial such as traffic management or public safety this reliability is a major advantage.
Additionally, cities with legacy infrastructure are more inclined to stick with On-Premises deployment models. These systems are often deeply integrated with existing infrastructure, and transitioning to cloud-based solutions may require significant investments in terms of time, money, and resources.
On-Premises deployments align well with long-term strategic goals for self-reliance and local control over city operations. While cloud solutions continue to grow, the flexibility and adaptability offered by On-Premises infrastructure make it particularly suitable for smart cities that need to balance innovation with cautious, incremental adoption of new technologies.
Technology Analysis
In 2024, the Machine Learning & Deep Learning segment dominated the Agentic AI in Smart Cities market, capturing more than 26.7% of the market share. This dominance is primarily driven by the ability of these technologies to process vast amounts of data in real-time, enabling cities to optimize various urban functions.
Machine learning (ML) and deep learning (DL) algorithms can analyze patterns, predict trends, and make autonomous decisions, which are essential in applications such as traffic management, predictive maintenance, and energy distribution. The ability of ML and DL models to continuously improve with more data also makes them highly adaptable for smart city solutions, further bolstering their widespread adoption.
Machine learning and deep learning technologies enable cities to leverage predictive analytics, allowing for proactive decision-making rather than reactive responses. For example, in traffic management, ML algorithms can analyze traffic flow patterns and predict congestion before it occurs, leading to smoother traffic operations and reduced emissions.
In smart grids, deep learning can optimize energy consumption based on real-time demand and supply conditions, contributing to more efficient power usage and sustainability efforts. This capability to improve efficiency and resource allocation is a key reason why ML and DL are leading the way in Agentic AI applications within smart cities.
Application Analysis
In 2024, the Smart Governance and Administration segment held a dominant position in the Agentic AI in Smart Cities market, capturing more than 23.9% of the market share. This dominance is largely attributed to the growing need for more efficient, transparent, and responsive government services.
Smart governance uses Agentic AI to automate administrative tasks, improve citizen engagement, and offer data-driven insights for better decision-making. By adopting AI, local governments can enhance public services, optimize resource allocation, and boost efficiency, making it essential for smart city development.
The application of Agentic AI in smart governance focuses on automating routine tasks, such as processing permits, managing public records, and handling citizen requests. This not only reduces operational costs but also enhances the overall citizen experience by providing faster, more efficient services.
AI-driven chatbots and virtual assistants manage citizen inquiries, while predictive analytics help authorities address issues proactively, improving governance effectiveness. AI also supports evidence-based policy-making, strengthening the role of smart governance in city planning and administration.
Key Market Segments
By Offerings
- Solution
- Smart Ticketing
- Traffic Management
- Passenger Information
- Connected Logistics
Others
- Services
- Deployment & Integration
- Consulting & Training
- Support & Maintenance
By Deployment
- Cloud Based
- On Premises
By Technology
- Machine Learning & Deep Learning
- Computer Vision
- Natural Language Processing (NLP)
- Blockchain-Enabled AI
- Others
By Applications
- Smart Governance and Administration
- Smart Transportation and Traffic Management
- Energy Management and Sustainability
- Public Safety and Security
- Smart Healthcare and Emergency Services
- Smart Infrastructure and Urban Planning
- Smart Retail and Commercial Zones
- Others (Smart Education and Public Libraries, etc.)
Key Regions and Countries
- North America
- US
- Canada
- Europe
- Germany
- France
- The UK
- Spain
- Italy
- Rest of Europe
- Asia Pacific
- China
- Japan
- South Korea
- India
- Australia
- Singapore
- Rest of Asia Pacific
- Latin America
- Brazil
- Mexico
- Rest of Latin America
- Middle East & Africa
- South Africa
- Saudi Arabia
- UAE
- Rest of MEA
Driver
Increasing Urbanization
One of the primary drivers of Agentic AI in smart cities is the rapid pace of urbanization. According to the United Nations, nearly 68% of the world’s population will live in urban areas by 2050, which creates the need for more efficient and sustainable city management.
As urban areas grow, the demand for advanced technology to manage infrastructure, traffic, waste, and energy systems increases. Agentic AI, with its ability to learn and adapt, is perfectly suited to handle such complex and dynamic environments. It can optimize traffic flow, predict power consumption, and improve waste management systems in real-time, reducing operational inefficiencies and improving residents’ quality of life.
Restraint
Data Privacy Concerns
Despite the numerous benefits, one significant restraint to the implementation of Agentic AI in smart cities is data privacy concerns. As AI systems gather large amounts of data, they often rely on the collection of personal information, such as user behavior, movements, and preferences.
This data is crucial for optimizing smart city systems like transportation, energy management, and healthcare. However, residents may feel uneasy about the potential misuse of their data, particularly in terms of surveillance, unauthorized access, or data breaches. Strict regulations, have made it clear that privacy protection is a priority, but enforcing these protections in a decentralized and rapidly evolving AI environment is challenging.
Opportunity
Improved Public Services
The integration of Agentic AI offers a significant opportunity for enhancing public services in smart cities. From healthcare to law enforcement, education to public transportation, AI can streamline many public sector services.
In healthcare, AI can predict potential outbreaks or track patient data to ensure better care delivery. Additionally, AI can assist in crime prevention by analyzing data from city cameras and sensors to detect unusual patterns or activities.
In the context of education, with the growing adoption of AI technologies, cities have the potential to drastically improve the efficiency, accessibility, and responsiveness of public services, benefiting citizens in various aspects of their daily lives.
Challenge
High Initial Costs and Infrastructure Requirements
One of the major challenges in implementing Agentic AI in smart cities is the high upfront costs and the need for advanced infrastructure. AI systems require significant investments in hardware, software, and ongoing maintenance. This includes setting up vast networks of sensors, data storage facilities, and high-performance computing resources to process vast amounts of data in real-time.
For many cities, particularly those in developing countries or regions with limited financial resources, the costs can be prohibitive. Furthermore, creating the right infrastructure to support the integration of AI into existing city frameworks requires time, effort, and collaboration across various government agencies and private sectors. Cities must also train staff to manage and operate these advanced systems effectively.
Emerging Trends
One of the emerging trends is the use of AI-powered traffic management systems. These systems not only predict traffic patterns but also dynamically adjust signal timings to reduce congestion, making commutes smoother and lowering pollution levels.
Moreover, AI is being employed in smart energy grids, where it helps to predict energy consumption patterns, optimize distribution, and reduce wastage. With the increasing adoption of IoT devices in cities, AI is enabling real-time data processing, which assists in monitoring everything from water quality to public safety.
Security is another area benefiting from agentic AI, with surveillance systems capable of identifying potential threats through facial recognition or abnormal behavior patterns. These trends are creating interconnected, self-regulating urban ecosystems that adapt to the needs of citizens, making smart cities not only more efficient but also more livable.
Business Benefits
The integration of agentic AI in smart cities boosts business efficiency and cuts costs by enabling data-driven decision-making and resource optimization. This enhances sustainability efforts, supporting corporate social responsibility goals.
For urban planners and local governments, AI enables predictive maintenance for infrastructure, reducing unexpected downtime and extending the lifespan of critical assets like roads, bridges, and utilities. AI can also enhance the delivery of public services, such as healthcare or law enforcement, by streamlining operations and predicting demand trends.
For the private sector, the use of AI in smart cities opens up new market opportunities. As cities become more connected, demand for IoT solutions, AI-powered analytics, and cybersecurity technologies is rising. Startups in the AI field have opportunities to collaborate with municipal governments or large corporations, developing innovative products and services tailored to urban needs.
Key Player Analysis
The rise of smart cities has paved the way for several key players to lead the development of these AI-driven solutions, transforming how cities operate and interact with their residents.
ABB Limited is a global leader in electrification, automation, and AI-driven smart city solutions. The company focuses on providing AI-powered technologies that optimize energy usage, improve sustainability, and streamline operations within urban environments.
EnFuse Solution specializes in advanced AI systems that enable better energy management and resource optimization for smart cities. The company provides AI solutions that focus on enhancing the performance of urban infrastructures such as lighting, water, and waste management.
AVEVA Group plc is a leader in engineering and industrial software, offering AI-powered solutions that enable smarter urban development. The company’s software suite allows cities to digitally transform their operations through predictive maintenance, real-time data monitoring, and efficient energy management.
Top Key Players in the Market
- ABB Limited
- EnFuse Solution
- AVEVA Group plc.
- Cisco Systems, Inc.
- Telefonaktiebolaget LM Ericsson
- Honeywell International Inc.
- International Business Machines Corporation (IBM)
- Kapsch TrafficCom AG
- Huawei Technologies Co., Ltd.
- Microsoft Corporation
- Oracle Corporation
- ams-OSRAM AG
- SAP SE
- Schneider Electric SE
- Others
Top Opportunities Awaiting for Players
- Improved Urban Mobility Solutions: Agentic AI can revolutionize transportation systems by enabling smarter traffic management, autonomous vehicles, and predictive maintenance for public transport. AI-driven solutions can optimize traffic flow, reduce congestion, and enhance public transportation routes. Companies offering smart mobility solutions have a unique opportunity to integrate AI for real-time traffic predictions, ultimately enhancing the overall commuter experience.
- Enhanced Public Safety and Security: AI-driven systems are already transforming city surveillance and emergency response. With advanced pattern recognition, Agentic AI can help cities predict and prevent criminal activities. This offers a huge opportunity for companies providing AI-based safety systems to tap into the growing demand for secure urban environments.
- Sustainable Urban Planning: AI-driven systems can analyze data from sensors to ensure that water and energy are used efficiently, and even predict maintenance for public infrastructure. Players in the environmental and sustainability sectors have an opportunity to provide smart solutions that help cities reduce their carbon footprint and improve quality of life.
- Smart Infrastructure Management: Agentic AI can enhance infrastructure management by predicting wear and tear, analyzing building performance, and offering smart energy grids. Companies focused on urban infrastructure and construction can leverage AI to create more resilient cities.
- Citizen Engagement and Smart Governance: AI-driven platforms can streamline communication between city governments and citizens. Governments can use Agentic AI to improve public services, offer personalized information, and enhance citizen engagement. Companies that focus on public administration technology can seize the opportunity to provide these intelligent systems for more transparent, efficient, and responsive city governance.
Recent Developments
- March 2024: Huawei launched its City Intelligent Twins solutions during MWC 2024. This architecture integrates IoT, cloud computing, and AI to enhance urban governance and improve the quality of life for residents.
- December 2024: At CES 2025, ams OSRAM showcased its EVIYOS® Shape technology, which integrates advanced lighting solutions for smart cities. This innovation aims to improve safety through enhanced visibility at pedestrian crossings and interactive public signage.
Report Scope
Report Features Description Market Value (2024) USD 1.88 Bn Forecast Revenue (2034) USD 58 Bn CAGR (2025-2034) 40.90% Base Year for Estimation 2024 Historic Period 2020-2023 Forecast Period 2025-2034 Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments Segments Covered By Offerings (Solution (Smart Ticketing, Traffic Management, Passenger Information, Connected Logistics, Others), Services (Deployment & Integration, Consulting & Training, Support & Maintenance), By Deployment (Cloud Based, On Premises), By Technology (Machine Learning & Deep Learning, Computer Vision, Natural Language Processing (NLP), Blockchain-Enabled AI, Others), By Applications (Smart Governance and Administration, Smart Transportation and Traffic Management, Energy Management and Sustainability, Public Safety and Security, Smart Healthcare and Emergency Services, Smart Infrastructure and Urban Planning, Smart Retail and Commercial Zones, Others (Smart Education and Public Libraries, etc.)) Regional Analysis North America – US, Canada; Europe – Germany, France, The UK, Spain, Italy, Russia, Netherlands, Rest of Europe; Asia Pacific – China, Japan, South Korea, India, New Zealand, Singapore, Thailand, Vietnam, Rest of APAC; Latin America – Brazil, Mexico, Rest of Latin America; Middle East & Africa – South Africa, Saudi Arabia, UAE, Rest of MEA Competitive Landscape ABB Limited, EnFuse Solution, AVEVA Group plc., Cisco Systems, Inc., Telefonaktiebolaget LM Ericsson, Honeywell International Inc., International Business Machines Corporation (IBM), Kapsch TrafficCom AG, Huawei Technologies Co., Ltd., Microsoft Corporation, Oracle Corporation, ams-OSRAM AG, SAP SE, Schneider Electric SE, Others Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements. Purchase Options We have three license to opt for: Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF) Agentic AI in Smart Cities MarketPublished date: February 2025add_shopping_cartBuy Now get_appDownload Sample -
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- ABB Limited
- EnFuse Solution
- AVEVA Group plc.
- Cisco Systems, Inc.
- Telefonaktiebolaget LM Ericsson
- Honeywell International Inc.
- International Business Machines Corporation (IBM)
- Kapsch TrafficCom AG
- Huawei Technologies Co., Ltd.
- Microsoft Corporation Company Profile
- Oracle Corporation
- ams-OSRAM AG
- SAP SE Company Profile
- Schneider Electric SE. Company Profile
- Others
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