Smart cities conjure visions of interconnected urban destinations where technology underpins improved living and working standards for all. It is a paradigm driving today’s urban planning, and countries across the world are at the forefront of its adoption, looking to the concept to enhance public and private sector efficiency, generate economic benefits, and improve citizens’ lives. However, traditional urban planning and management approaches have reached critical limitations, and there is a pressing need to increase resource efficiency, improve service delivery, address environmental degradation, reduce infrastructure strain, introduce intelligent systems, address resistance to technological adoption, and enhance citizen engagement. Thus, cities need a comprehensive smart city transformation to revolutionize their conventional practices through the strategic application of artificial intelligence (AI) technologies, process optimization, and stakeholder collaboration. The primary objective of this chapter is to provide a comprehensive introduction to AI-driven smart cities and present a holistic framework that urban organizations can utilize for developing and communicating an intelligent sustainability strategy to both their internal and external stakeholders. The chapter also discusses the perceived benefits of successful AI-driven urban transformation, as well as the challenges that cities must overcome in embracing this technological evolution. Finally, the chapter outlines the holistic AI-driven smart city framework that helps stakeholders define what an AI-driven smart city entails, identify the key AI technologies needed for sustainable urban transformation, understand the benefits of integrating AI into urban systems, and recognize the challenges that must be addressed to implement AI-based strategies for sustainable development successfully. The value of the framework is two-fold as it (1) serves as a blueprint for cities to develop and execute an AI-driven sustainable development strategy, and (2) provides the groundwork for future discussions on AI applications in sustainable urban development.