A new Gartner study indicates that, while governments are cutting back in many areas, technology—especially artificial intelligence—will remain a clear priority. According to the CIO and Technology Executive Survey 2026, 52% of public sector CIOs outside the U.S. expect to increase their IT budgets in 2026, driven by the need to modernize services, boost productivity, and respond to increasing geopolitical tensions.
Cybersecurity and AI Lead the New Spending
When asked about the areas where investments will most likely grow, government CIOs clearly prioritize four technologies above the rest:
- Cybersecurity: 85% plan to increase their budgets.
- Traditional artificial intelligence (machine learning, automation, etc.): 80%.
- Generative AI: 80%.
- Cloud platforms: 76%.
The message is clear: governments no longer see AI as an experiment but as a core component for protecting critical infrastructure, automating processes, and delivering faster, more personalized digital services.
AI is Already Moving to Production in the Public Sector
The Gartner report highlights that:
- 74% of government CIOs (outside the U.S.) have already deployed AI or plan to do so within the next 12 months.
- For generative AI, the figure rises to 78%.
- Approximately 49% are testing or about to deploy AI agents to automate more complex tasks.
Gartner describes these AI agents as one of the most significant transformation levers for 2026 but warns against getting carried away with hype and neglecting more mature technologies like traditional machine learning or process automation, which still deliver tangible returns in daily administration operations.
Meanwhile, government CIOs acknowledge high political and social pressure:
- A 51% plan to prioritize improving public staff productivity in 2026.
- A 38% aim to launch new digital services and products.
- A 37% seek to enhance citizen experience in their interactions with government.
AI is seen as the ideal tool for these goals: reducing manual bureaucracy, increasing internal automation, and providing smarter, user-focused services.
Pressure to Demonstrate Impact, Not Just “Innovation”
The context, however, is complex. Many governments face fiscal pressures, short electoral cycles, and constant citizen scrutiny. This compels public CIOs to justify every euro spent on technology.
Arthur Mickoleit, a Gartner analyst, summarizes it this way: IT leaders must demonstrate the “impact on mission” of each project, not just cost savings or user experience improvements. This includes clear metrics in areas such as:
- Reducing processing times.
- Lowering human error in critical processes.
- Increasing resilience against cyberattacks.
- Achieving better outcomes in public policies (health, employment, social services, etc.).
In other words: AI passes the test if it improves specific public policy indicators, not because it’s the “tech of the moment.”
Digital Sovereignty and Distrust of Major Providers
Another key message from the survey is the growing influence of geopolitics and digital sovereignty in technology decision-making.
- A 55% of government CIOs expect changes in how they work with technology providers due to geopolitical tensions and data sovereignty requirements.
- A 39% plan to work more closely with regional providers, reducing reliance on large global hyperscalers.
This translates into:
- Greater attention to where data is stored and under what jurisdiction.
- Preference for solutions that allow avoiding vendor lock-in.
- Greater interest in hybrid and multi-cloud infrastructures, including private cloud and sovereign data centers.
Gartner advises CIOs to carefully map critical dependencies within their technology stacks to better withstand future crises—from trade sanctions to cloud service disruptions.
From Strategy to Implementation: What Public CIOs Should Do
While each country and agency has its own specifics, Gartner’s study suggests several action points for CIOs to maximize AI and other prioritized technologies’ impact:
- Start with internal efficiency
Prioritize AI projects that free up public employees’ time: assisted document generation, report drafting, automating repetitive back-office tasks, or analyzing large case files. These are low-risk, high-return use cases. - Update governance and procurement processes
- Adapt procurement frameworks to buy AI services (including AI agents) with clear safety, transparency, and explainability standards.
- Include requirements for data protection, traceability, and model audits.
- Focus on citizen experience
AI-powered virtual assistants, chatbots, and portals must add layers of transparency and control, rather than create barriers between the administration and citizens. Explaining when a machine responds, its limits, and when to escalate to a human agent remains key to maintaining trust. - Invest in talent and AI literacy
Without staff who understand AI’s limitations and risks, strategies stay at the powerpoint level. Training technical and operational staff— not just IT teams—is essential for moving projects beyond pilot phases. - Build a robust data strategy before “planting” models
Many failures in public AI projects are not due to the models themselves but to poor data quality and governance. Cataloging, cleaning, and unifying data sources is a critical preliminary step.
Government AI: More Pressure, But Also More Maturity
The scenario Gartner outlines is paradoxical but logical: tightened overall budgets, yet increased funding for IT—particularly AI, cybersecurity, and cloud. Public administration is entering a phase where digitizing forms is no longer enough; now, it’s about redefining entire processes with extensive data and algorithm support.
The next wave—featuring generative AI and AI agents—will arrive swiftly, and CIOs who cannot translate current experimentation into measurable results risk losing their maneuvering space.
Conversely, those who effectively combine regulatory prudence, technological ambition, and mission focus will be better positioned to demonstrate that AI is not just an expense but a real driver of public sector transformation.
via: gartner