This panel addresses the intricate balance between AI advancement and data governance in the context of smart cities. It features a dialogue among diverse stakeholders including legal experts, technology innovators, and NGO representatives, each bringing a unique viewpoint on managing data ethically and effectively in urban environments. The discussion will focus on the challenges and opportunities in utilizing AI and synthetic data to enhance urban life, while respecting data privacy and individual rights. We will delve into the advancing landscape of data anonymization methods and examine how EU policies are crafting an ecosystem favorable for digital innovation. This session aims to thoroughly investigate the collaboration across various sectors to propel AI advancement in smart cities, focusing on aligning technological growth with fundamental values of data protection and building citizens’ trust.