Business sector and the smart city in the artificial intelligence (AI) era: Ethics, privacy, and cybersecurity

In recent years, an increasing number of cities have developed a smart city profile by offering a range of smart services to residents, tourists, city managers, and investors. There are numerous possibilities for development provided by information and communication technology (ICT). Against this backdrop, this chapter suggests focusing on challenges and risks that rapid and excessive digitalization brings to the society, including the business sector. Due to the “trading” of smart service convenience provided by business for the disclosure of personal data, the introduction of artificial intelligence (AI) and AI-based tools will possibly have a negative impact on people’s privacy and security. The chapter’s central argument is that the rapid implementation of AI in smart city will result in substantial failures in sustainable development because of the gap between AI capabilities used by city managers and society-focused decision-making. Scenario analysis was used to identify possible business models in smart cities within tech innovation and business roles. Thus, the authors have connected ethical and security issues related to technology and business network infrastructure with questions of control, surveillance, data privacy and cybersecurity, public and private decision-making, and inequality. As a result, significant risks, and concerns about the use of AI in smart cities were identified. To assess potential risks and opportunities for promoting sustainable development, four models of interaction between tech, business and the society are proposed, with policymakers playing a mediating role. © 2025 selection and editorial matter, Anna Visvizi, Orlando Troisi, and Mara Grimaldi; individual chapters, the contributors.