Government IT Spend Set to Rise in 2026 as AI Priorities Strengthen
More than half of non-US government CIOs (52 percent) expect bigger IT budgets in 2026. That's based on a Gartner survey of 2,501 technology leaders conducted in May-June 2025, including 284 from government. Despite fiscal pressure, public-sector teams plan to keep investing where it matters.
"Geopolitical shifts and economic volatility are forcing government CIOs to rapidly adjust their priorities for next year," said Gartner analyst Arthur Mickoleit. The message is clear: every pound needs to deliver mission-critical outcomes.
Where the money is going
- Cybersecurity: 85 percent
- AI: 80 percent
- Generative AI: 80 percent
- Cloud platforms: 76 percent
AI adoption is accelerating: 74 percent have deployed or plan to deploy AI within 12 months, and 78 percent say the same for generative AI. Nearly 49 percent expect to roll out AI-powered agents, such as digital assistants, in the same window. Interest is high, but leaders should balance "agentic AI" pilots with proven tools like machine learning and process automation.
What this means for your 2026 plan
- Lock down cybersecurity first. Prioritize identity, device posture, data protection, and incident response. Map each control to measurable risk reduction and public-service continuity.
- Pick AI use cases with fast ROI. Start with case triage, citizen support chat, summarization for records, and back-office automation. Define success metrics (time saved, resolution rate, service quality) before deployment.
- Pilot AI agents with guardrails. Human-in-the-loop review, policy-aligned prompts, red-teaming, and logging should be in place from day one. Keep pilots scoped and compare outcomes to non-AI baselines.
- Standardize cloud patterns. Consolidate on a small set of platforms, enforce reference architectures, and implement FinOps for spend visibility. Tie every new workload to a clear service objective.
- Modernize data foundations. Improve data quality, classification, and access controls so AI and analytics can be trusted. Automate retention and audit trails to meet compliance.
- Upskill the workforce. Equip teams in AI safety, prompt practices, automation, and secure cloud. Consider structured learning paths for different roles to speed adoption and reduce rework.
Citizen experience and productivity
More than 51 percent of government CIOs rank internal productivity as the top goal for 2026, followed by new digital services (38 percent) and improved citizen experience (37 percent). Treat these as one agenda: streamline back-end processes, then expose practical features to the public. Fewer steps, faster decisions, clearer status updates-these are the wins people feel.
Procurement reset and digital sovereignty
Vendor strategies are shifting: 55 percent of CIOs expect to reshape relationships with providers, and 39 percent plan to favor regional vendors to reduce sovereignty risk. Bake location, data residency, and support models into RFPs and contracts. Set measurable SLAs for model updates, security patches, uptime, and exit paths to avoid lock-in.
- Questions to ask now: Where is data stored and processed? How are models evaluated and updated? What's the audit trail? What happens at contract end? How quickly can we export data and configurations?
How to de-risk AI adoption
- Start with low-stakes, high-volume tasks and expand only after proving value.
- Use a model registry, versioning, and monitoring for drift, cost, and fairness.
- Implement privacy-by-default: data minimization, masking, and retention limits.
- Publish clear use policies for staff and vendors, with regular audits.
If you need a quick refresher or role-based upskilling plans for your teams, explore curated learning paths and certifications built for practical rollout:
Bottom line
Budgets are set to grow, but scrutiny will grow with them. Focus spend on cybersecurity, practical AI, and repeatable cloud patterns that directly improve services and productivity. Keep vendor choices flexible, enforce data safeguards, and invest in people so new tools actually stick.
Source: Gartner survey of technology executives (May-June 2025). For related research, see Gartner's newsroom for public-sector insights: Gartner Newsroom.
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