How San Jose Is Using AI to Fix Government Inefficiency and Rethink Public Services
San Jose uses AI to improve government efficiency, from transit to grant writing. Mayor Mahan leads efforts to automate services and upskill city employees.
San Jose’s AI-Driven Approach to Government Efficiency
San Jose Mayor Matt Mahan recently experienced firsthand how artificial intelligence (AI) is speeding up the city’s bus system—so much so that buses began running ahead of schedule. For Mahan, an entrepreneur-turned-politician in Silicon Valley’s core, this “too-efficient” transit system is a positive sign. More importantly, it highlights the potential AI holds to automate and improve many government functions.
San Jose may not have the startup glamour of San Francisco, but it’s an ideal testing ground for AI in government. The city is home to Nvidia’s headquarters and a cluster of semiconductor companies essential to AI development. With a population of 1 million—20% larger than San Francisco—and a strong engineering talent pipeline from San Jose State University, the city has the resources to push AI adoption forward.
California faces a $20 billion budget shortfall amid broader fiscal challenges and political gridlock. Many technologists argue that software automation could be part of the solution. Mahan, who co-founded a startup with Sean Parker, is leading San Jose’s efforts to integrate AI. Under his leadership, city vehicles are equipped with pothole-detecting cameras, and AI tools have helped city employees secure multimillion-dollar grants. He is exploring ways to use AI’s predictive power to address homelessness by identifying individuals at risk and intervening early.
GovAI Coalition: Sharing AI Best Practices
Mahan helped establish the GovAI coalition, which brings together local government leaders nationwide to exchange insights on AI tools. The coalition acts like a review platform for mayors evaluating new technology, focusing on practical benefits. “What I kept hearing from people was that they just want government to work,” Mahan said. “The public sector hasn’t become more productive or efficient; in fact, arguably, it’s gotten worse.”
Challenges with Current Software Solutions
Despite the promise, many governments are burdened with numerous software-as-a-service (SaaS) tools that often deliver minimal value. San Jose spends tens of millions annually on such tools, including grant-writing software. Yet, a city employee recently built a custom AI chatbot that helped win a $2.5 million grant with minimal effort, underscoring opportunities for tailored automation.
The city’s building permit process illustrates inefficiency. Mahan points out that lengthy delays often stem from excessive human discretion, even when zoning rules are clear. “It’s shocking that getting all the permits for a project we’ve already zoned for can take two years,” he said.
Upskilling City Employees and Supporting AI Startups
To increase AI adoption, San Jose launched a 10-week AI upskilling program in partnership with San Jose State University. This training helps city employees apply AI tools creatively, saving over 10,000 hours of work after just one cohort. The city also provides grants to AI startups, aiming to attract young tech founders who might otherwise head to San Francisco. The pitch is clear: San Jose wants to be their first client.
Looking Ahead: The Realities of Government AI Adoption
California’s governments must automate processes to reduce costs. However, effective AI integration requires more than just training employees—it demands investing in infrastructure and custom solutions. Off-the-shelf products rarely deliver significant improvements.
Governments will need to become software builders themselves, hiring skilled engineers to develop and implement AI systems tailored to public sector needs. San Jose’s pioneering use of AI to identify homeless encampments—the first in the US—has sparked debate among local outreach workers concerned about potential misuse.
Federal initiatives, such as the AI Action Plan launched in 2023, support AI literacy and workforce development, preparing government employees for changing job demands. For those interested in strengthening AI skills relevant to government roles, exploring targeted training programs can be a practical next step.
