The paper discusses the potential role that artificial intelligence can play in innovative city initiatives and urban planning from a developing country perspective. The key research question will be: How does AI integration address particular challenges and deliver benefits in the above contexts? Based on a qualitative analysis supported by case studies from Accra, Bangalore, Lagos, and Medellín, the research presents socio-economic, cultural, and infrastructural challenges peculiar to the regions under study. Critical AI applications include monitoring waste management, water distribution, flow of traffic, and urban planning, with significant improvements in efficiency and sustainability. The study enumerates the importance of robust data systems, community engagement, and public-private partnerships. It also lays down recommendations for embedding ethical frameworks and increasing capacity among local planners. It enumerates challenges such as data privacy concerns, digital divides, and algorithmic bias and puts a strong case for participatory decision-making and transparency for fostering trust in AI technologies. AI holds tremendous potential for improving this field. Still, there is a significant need to overcome the multi-dimensional barriers associated with successfully implementing AI in developing countries. With enhanced data collection, development of collaborative partnerships, and laying the foundation for robust ethical frameworks, AI could be utilized to make cities more innovative and sustainable while genuinely serving the needs of diverse citizens.