arXiv:2509.16724v1 Announce Type: cross Abstract: This research examines how Artificial Intelligence (AI) can improve participatory budgeting processes within smart cities. In response to challenges like declining civic participation and resource allocation conflicts, the study explores how online political participation can be improved by AI. It investigates the state capacity governments need to implement AI-enhanced participatory tools, considering technological dependencies and vulnerabilities. It analyzes technological and administrative structures, actors, interests, and strategies to understand the dynamics of online political participation technologies in the case of Sao Paulo, Brazil. The study contributes to understanding how technological advancements can reshape participatory budgeting processes. In a broader sense, the research highlights how AI can transform participatory institutions by offering new tools for citizens and also for government officials in charge of participatory processes within smart cities.