San Jose wants to shape how local governments use artificial intelligence, and it’s restructuring its AI coalition into an independent nonprofit to do it.

The city is converting GovAI — a coalition founded by San Jose in 2023 — into a nonprofit, using a $150,000 grant from the Packard Foundation to fund the transition. The conversion would allow GovAI to pursue philanthropic funding, expand partnerships and set AI policies and best practices for local government use.

While San Jose will lead the transition, it is sharing responsibility with at least six others on the coalition board.

The resolution — unanimously adopted by the City Council on Tuesday — calls for at least six specialized committees covering areas such as community engagement, data governance and procurement. Board members would serve as individuals rather than formal representatives of their cities, with no seats reserved for specific agencies or cities.

The transition into a 501(c)(3) nonprofit is expected to take about nine months to obtain federal nonprofit status. Beyond grants, GovAI plans to generate revenue through paid events, training and private-sector sponsorships. An executive director, selected by the board, will oversee day-to-day operations.

Mayor Matt Mahan said San Jose took the initiative to start the coalition — and now lead its transition — to stay ahead of technological changes, pointing to the city’s position as a major tech hub.

Mahan is currently running for governor of California, with strong support from Silicon Valley tech executives. San Jose is home to several AI startups, and the Bay Area is the birthplace of some of the largest names in AI, including OpenAI and Anthropic.

San Jose also hosts the annual GovAI Coalition Summit, where participants explore AI trends, ethical practices, data management and technology applications in governance, including public safety and transit. This year’s summit is scheduled for Dec. 9-11 at the McEnery Convention Center.

“If any city is going to figure out how to use these tools, use them safely, create the right regulatory and policy environment, and leverage them to enhance public services — it should be San Jose,” Mahan said.

GovAI has grown from about 1,000 members to more than 3,000 representing at least 900 agencies across multiple countries, including Canada, the United Kingdom and Spain.

Across the United States, governments are increasingly turning to AI to improve city services.

San Francisco’s city attorney began using AI last year to analyze municipal codes and local policy. San Jose has deployed cameras powered by AI to identify potholes, spot parking violations and flag illegal dumping in real time — with the city reporting 97% accuracy. California state employees, meanwhile, are piloting Poppy, a generative AI tool that can produce executive summaries, retrieve data for reports and audits and automate technical processes. The pilot launched in September and runs through June.

The coalition aims to scale those practices and develop standards for using the technologies ethically and efficiently.

City staff cited various examples of how San Jose is using — or plans to use — AI, including road safety detection, language translation and streamlining routine clerical tasks.

While the resolution focused on the coalition’s restructuring, officials didn’t let the vote pass without raising broader questions about AI’s impact on the public workforce.

Councilmember Peter Ortiz expressed concern over AI’s potential for bias and discrimination against marginalized communities and city employees, and called for protections against unintended consequences.

“I think we also have the responsibility to look at what potential guardrails should be,” Ortiz said. “Whether that’s municipal jobs or careers, or even in the workplace outside, or just in society as a whole.”

Ortiz pointed to the volatile tech job market as a cautionary example, noting that Silicon Valley firms are shrinking the very teams that built the AI tools now automating their work.

Even as San Jose faces a $56 million budget deficit — and imposed a targeted hiring freeze late last year — Mahan addressed fears of AI-driven job cuts.

“It’s incumbent upon us to make it true that these tools enhance our workforce and productivity, but are not deployed as a labor replacement,” he said. “If anything, we use technology to get leverage and more productivity impact for our community, but we’re going to continue to need people.”

The coalition’s board is chaired by Khaled Tawfik, director and chief information officer for the city of San Jose, and includes chief information officers from San Diego, Bellevue and other cities and public agencies across the country.

Tawfik said the coalition was designed not just to adopt AI but to wrestle with its harder questions.

“This is just the beginning,” he said.

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