The rapid pace of urbanization and the pressing need for sustainability have made smart cities a promising solution to modern urban challenges. Artificial Intelligence (AI) has emerged as a transformative force in reshaping urban spaces into sustainable, efficient, and livable environments. This paper investigates the pivotal role of AI in advancing sustainable urban development and smart city initiatives, emphasizing its applications in energy-efficient building design, intelligent traffic management systems (ITMS), waste management, and resource optimization.