AI has the potential to revolutionize local government operations, but U.S. cities face significant challenges in adopting these technologies. In interviews with more than 150 local leaders in dozens of U.S. cities, respondents consistently pointed to three problems: sclerotic, siled bureaucracies, burdensome regulations, and an aversion to risk. AI, however, could be a turning point. Cities have successfully deployed AI to: automate tasks, make better decisions with data, and better engage with the community. The key factors in cities that have succeeded in achieving this are: a clear vision and strategy, systematic decongestion, public-private partnerships and respect for governance principles.