Public agencies have a strong interest in artificial intelligence (AI) systems. However, many public agencies lack tools and frameworks to articulate a viable business model and evaluate public value as they consider investing in AI systems. The business model canvas used extensively in the private sector offers us a foundation for designing a public AI canvas (PAIC). Employing a design science approach, this study reports on the design and evaluation of PAIC. The PAIC comprises three distinctive layers: (1) the public value-oriented AI-enablement layer; (2) the public value logic layer; and (3) the public value-oriented social guidance layer. PAIC offers guidance on innovating the business models of public agencies to create and capture AI-enabled value. For practitioners, PAIC presents a validated tool to guide AI deployment in public agencies. •We design an artifact (Public AI Canvas) grounded on business model canvas for public agencies.•Business models of public agencies require renovation for use of AI systems.•Public agencies use public value logic to deploy AI systems.•Social guidance impacts the creation and capture of public value.•We validate the artifact through practitioners' interviews.