POLITICO Tech - "Coming to a City Near You: AI-Powered Government"

Date: October 2, 2025
Host: Stephen Overle
Guest: James Anderson, Head of Global Government Innovation Programs at Bloomberg Philanthropies

Main Theme

This episode explores how artificial intelligence (AI) is transforming local governments, focusing on practical deployments, challenges, and opportunities at the city level. Host Stephen Overle interviews James Anderson to discuss real-world examples, roadblocks, and the evolving role of cities in leading AI adoption for public services.

Key Discussion Points & Insights

1. The Role of AI in Local Government

• Pain Points Driving Adoption
  • City halls are under-resourced and overwhelmed, often carrying the weight of crises from housing to climate to gun violence.
  • AI helps bridge the gap between the rising expectations of residents and constrained public resources.
  • Cities are seeking ways to "make one plus one equal more" through efficiency and smarter delivery.
  • Quote:

    "AI and better data and digitization...I think mayors recognize a way to address the gap between the ambitions and expectations of local residents and the amount of resources that they're getting." – James Anderson [02:11]

2. Why Local Governments Are at the Forefront

• AI’s biggest direct impact will be at the city level, improving everyday services.
• Local governments are better positioned to make AI "human-centered," benefiting residents in meaningful, immediate ways.
• Example: Boston is using AI to optimize school bus routes, tackling both traffic congestion and student tardiness.
  • Quote:

    "Local government is where AI hits the street and it's where we're going to show that AI can be human centered." – James Anderson [04:36] "If AI can help us fix that mess, that's a huge win and a great example of how this will really touch down in people's lives in a way that matters." – James Anderson [05:19]

3. What Makes a City Ready for AI?

• Cities need three core ingredients for effective AI adoption:
  1. Good Data: Years of improvements in data governance and awareness of potential biases.
  2. Tech Skills In-House: It's no longer enough to outsource; cities need staff who understand both risks and technicalities to be smart partners.
  3. Leadership/Change Management: The toughest but most crucial area; leaders must guide staff through new workflows and job changes.
     • Reference to Mike Bloomberg's pioneering 311 system in NYC as a major change management endeavor.
  • Quote:

    "When you're looking at the power of AI and digitization, if you're not focused on the leadership, culture, change management piece, you're going to have small deployments...not going to achieve the impact at scale." – James Anderson [09:56]

4. Overcoming Resistance and Upskilling Staff

• Cities like Boise emphasize hands-on learning for department heads and program managers to demystify and empower use of AI.
• "Handholding," or supporting staff as they adapt, is critical.
• Empowering civil servants increases comfort and ownership over technological change.
  • Quote:

    "How do we help civil servants become comfortable and knowledgeable about the technology so that they can begin to feel empowered...and they can feel that this is a tool that can help me do my job better?" – James Anderson [10:55]

5. Resource Constraints & Financial Sustainability

• The modern movement is less about massive new spending on flashy "smart city" dashboards, and more about modernizing existing processes and upskilling existing staff.
  • Quote:

    "Those days are in the rearview mirror. I think what we're talking about now is how do we help local governments become digital organizations?" – James Anderson [12:30]

6. Tech Talent Shortages & Motivation

• Recruiting and retaining tech talent in cities is tough due to uncompetitive pay relative to the private sector, especially in tech hubs.
• However, many technologists are motivated by mission and impact, not just salary, and are moving to public service roles for fulfillment.
  • Quote:

    "They want to be a part of improving their cities. And they recognize that public sector is not where you make the big bucks...But you can be a part of improving your community. And that is attractive to people." – James Anderson [14:23]

7. Navigating Partnerships with Big Tech

• Cities face expertise asymmetries when negotiating with major AI firms for essential service delivery.
• Bloomberg Philanthropies and similar groups are working to "upskill" local officials so they’re less reliant and more discerning in these partnerships.
• There’s a dynamic, fast-evolving network of city officials sharing both positive and negative experiences with tech vendors—creating a collective intelligence that helps level the playing field.
  • Quote:

    "Trying to reduce some of those asymmetries that I think historically have really created disadvantages for the public sector." – James Anderson [15:57]

8. Cities as AI Innovation Leaders

• Cities are quickly establishing themselves as lighthouses for human-centric AI, thanks to peer-to-peer knowledge-sharing, motivation by necessity, and strong leadership.
• Predicts cities will continue pioneering major AI improvements for everyday life in the coming years.
  • Quote:

    "City governments are going to show us the way forward... those networks are lubricated and functioning effectively gives them a huge advantage to share information about what is working, what isn’t, what companies are great partners, who aren’t." – James Anderson [18:03]

Notable Quotes & Memorable Moments

• James Anderson on AI as a service tool:

  "It’s not a miracle drug, but it can do a lot to help them really improve the way that services are being delivered." [03:40]

• James Anderson on legacy issues:

  "You can't just put a crappy process online and say, voila, success. There's a real need to kick the tires of existing services." [05:58]

• Stephen Overle, distilling change management:

  "Is change management kind of a euphemism for essentially holding people's hand, walking them through this?" [10:08]

• James Anderson, on motivation for moving into the public sector:

  "They’re not optimizing for profit. They're optimizing around mission." [14:23]

Important Segment Timestamps

• [02:11] – The resource gap facing city halls and how AI fits in.
• [04:36] – AI's most tangible benefits expected at the local government level.
• [06:52] – Examples of AI projects: Boston school buses, Chattanooga affordable housing.
• [08:02] – What makes a city "AI-ready": Data, tech skills, leadership.
• [10:30] – Change management and upskilling staff, with Boise as an example.
• [12:20] – Sustainable modernization over expensive "smart city" dashboards.
• [13:58] – Tech/AI talent shortages and motivating factors.
• [15:58] – Avoiding dependence on large tech vendors; upskilling and sharing knowledge.
• [18:03] – Cities' role as future leaders in AI-powered governance.

Conclusion

James Anderson believes city governments are on the brink of leading the next wave of effective, human-centered AI deployments. By focusing on quality data, building in-house tech expertise, and investing in strong leadership and change management, cities can overcome both resource and talent gaps. Through collaborative sharing and strategic upskilling, local governments are positioned not only to adopt AI, but to do so in a way that genuinely improves residents’ daily lives.

For those seeking a look at where AI-powered government is heading, this episode paints an optimistic but pragmatic picture centered on the unique needs—and strengths—of America’s cities.