In 2025, city residents increasingly expect local governments to deliver tangible results. Bloomberg Philanthropies' Government Innovation team has been devoted to equipping city halls with the skills and tools necessary to produce impactful solutions. The focus on innovation facilitates improved core services and boosts public trust, enabling city governments to address pressing challenges effectively.

One primary initiative was the 2025 Mayors Challenge, which encouraged cities worldwide to propose innovative ideas for enhancing vital services like sanitation and transportation, generating over 600 submissions. For instance, cities like Belfast, Northern Ireland, and Fez, Morocco, implemented creative approaches to urban issues by utilizing innovation methods like journey mapping and coalition-building.

Cities are increasingly adopting artificial intelligence (AI) to create meaningful change. Kyiv's use of AI to assist young people in career planning during wartime exemplifies this shift. Similarly, Luján de Cuyo, Argentina, is leveraging AI for tailored water conservation strategies and pothole identification, demonstrating that localized AI development can enhance essential services and improve residents' daily lives.

Engagement in open innovation challenges has further expanded, as seen in the Dominican Republic, where citizens contributed over 500 ideas aimed at doubling GDP by 2036. Collaborations with organizations like U.S. Digital Response are helping city halls recruit talent knowledgeable in data and technology, fostering a robust environment for innovation.

Finally, the Youth Climate Action Fund empowers young people to lead local projects, cultivating trust in city leadership while harnessing their creativity to tackle community challenges. Cities are learning that engaging youth not only strengthens democracy but also lays the groundwork for sustainable progress. Overall, these concrete applications of AI and innovation are transforming urban governance and enhancing citizens' lives.

New directives from the White House aim to mitigate the risks posed by artificial intelligence (AI) in federal agencies that affect Americans daily, including the Transportation Security Administration (TSA) and federal healthcare systems.

On Thursday, Vice President Kamala Harris unveiled a comprehensive policy from the Office of Management and Budget (OMB) mandating federal agencies to implement safeguards against AI-related harms, enhance transparency in AI use, and recruit AI experts. This initiative follows President Joe Biden's executive order established during the Global Summit on AI Safety in the UK last October.

A key focus is the protection against "algorithmic discrimination." The new OMB guidelines will require agencies to "assess, test, and monitor" AI technologies. For instance, travelers will have the option to decline the TSA's facial recognition technology, which has been shown to have inaccuracies, especially for individuals with darker skin tones.

In healthcare, systems like Medicaid and Medicare must include human oversight for AI applications in diagnostics and data analysis, ensuring safety and accuracy. Moreover, AI is being harnessed to combat fraud; notably, the U.S. Department of the Treasury used AI to recover $325 million from check fraud, demonstrating significant financial advantages.

The OMB policy also calls for federal agencies to maintain public inventories of their AI tools, enhancing accountability and risk management. To bolster expertise, each agency will appoint a "Chief AI Officer," and the administration plans to recruit 100 AI specialists through a national talent search.

Additionally, the policy encourages responsible AI innovations, like FEMA's use of AI for disaster forecasting and the CDC's machine learning applications for disease spread predictions. Overall, the OMB policy aims to increase accountability, transparency, and public safety in AI utilization.

By Chris Teale,
Managing Editor, Route Fifty
JANUARY 6, 2026 01:00 PM ET

The New Deal Forum has recognized several state and local governments for their innovative use of artificial intelligence (AI) to enhance public services. These advancements, however, come with concerns surrounding privacy, security, and regulation that require deeper attention.

Late in 2025, President Donald Trump issued an executive order aimed at minimizing state-level AI regulations, claiming they hinder innovation. This order may face legal scrutiny, especially after U.S. Sen. Ed Markey introduced legislation to counteract it, asserting the need for responsible AI oversight benefiting marginalized communities.

A recent report from NewDEAL Forum highlights the essential role of state policymakers in implementing safeguards for residents and leveraging AI to improve government efficiency. AI has demonstrated tangible benefits—helping to anticipate residents' needs, streamline public benefits, optimize traffic safety, and enhance community engagement—all crucial for delivering quicker, more equitable services. For instance, states like New Hampshire and Maryland have effectively used AI to expedite the public benefits process.

To fully harness AI, the report urges state agencies to collaborate with technology providers and ensure systems are user-centric to simplify access. Additionally, comprehensive training and support for public workers are vital as they embrace AI tools, potentially reducing workloads and improving service delivery.

Despite the optimism around AI's capabilities, potential pitfalls remain, including threats from malicious use of the technology. NewDEAL advocates for a balanced approach to regulations on AI systems, particularly those advancing rapidly. As the public sector navigates these challenges, it must prioritize creating AI governance models that focus on the public good to realize the full potential of this transformative technology.

Reflecting on the past year, I take immense pride in our collective achievements, particularly in leveraging AI to enhance government operations, research, and education. At Google Public Sector, our collaborations with innovative leaders have pushed boundaries, showcasing dramatic advancements.

One key highlight is our commitment to providing accredited commercial cloud services, exemplified by the launch of Gemini in Workspace apps—recognized as the first generative AI assistants to receive FedRAMP High authorization. This includes essential tools like Agent Assist and Vertex AI Vector Search, which automate institutional knowledge and improve decision-making efficiency.

Our partnership with the Defense Logistics Agency modernized global supply chain operations through a shift to an AI-enabled commercial cloud. This initiative promises enhanced operational efficiency, underpinned by a substantial $200 million contract from the DoD to boost their AI capabilities.

Security is paramount, and our Zero Trust approach amplifies protection for critical workloads. We achieved DoD Impact Level 6 authorization, allowing secure handling of classified data while employing powerful AI services—vital for defense operations.

The introduction of Gemini for Government constitutes a significant leap in productivity; this platform is being adopted by the Department of War to streamline administrative functions for three million military and civilian personnel. Similarly, the FDA is deploying advanced AI workflows to enhance public health efforts, and the U.S. Department of Transportation is utilizing Google Workspace with Gemini for improved agency-wide collaboration.

As we look ahead, the potential for AI to transform government efficiency and responsiveness is immense. At Google Public Sector, we remain committed to fostering innovation and supporting our partners in their missions to serve the public effectively.