AI in Government and Public Services Market Size & Share 2026-2035

AI in Government and Public Services Market Size

The global AI in government and public services market was valued at USD 19.7 billion in 2025. The market is expected to grow from USD 23.3 billion in 2026 to USD 115.3 billion in 2035 at a CAGR of 19.4%, according to latest report published by Global Market Insights Inc.

Government digital transformation programs are key factors behind the growth of the market as organizations are adopting advanced technologies to transform their legacy systems and move towards cloud-based and automated workflow systems. It helps governments to use AI into various administrative processes including document processing, identity verification and delivery of services to citizens. It helps reduce manual labor costs and increase transparency.

For instance, in April 2025, U.S. Office of Management and Budget's Memorandum M-25-21 instructs all federal agencies to appoint Chief AI Officers within 60 days, form AI Governance Boards within 90 days, and implement public AI strategies within 180 days. These directives immediately drive the need for AI technologies, platforms, and services. The Canadian federal government AI strategy for 2025 to 2027 ensures the creation of AI implementation progress reports, with each department to find three areas with high potential for AI use.

The growing importance of data-driven decision making and the ability of governments to collect large amounts of public data have been driving increased adoption of AI in governments. The latter allows governments to perform analysis of their data to make more informed decisions in terms of budgeting, health care planning, taxation, and infrastructure construction. For instance, according to the World Bank report 2025, proactive policies on the use of AI-enabled analytics by governments is essential to seize opportunities and avoid risks as the world becomes more complicated. Less than half (47%) of the OECD governments’ valuable datasets are openly available, with 37% for education and 42% for health and welfare sectors.

With the increasing need for better security and safety measures, the market for AI-driven surveillance, threat detection and emergency response technologies will see high levels of demand. Governments will increasingly be using artificial intelligence for monitoring critical infrastructure and cyber threats for facilitating disaster response operations in real time. This not only speeds up the response but also ensures public safety. For instance, The Canadian government’s system called Passenger Assessment and Clearance Technology utilizes AI to target cargos, which results in screening 10 times more cargos per hour and coverage increased from 6% to 100%. According to the U.S. OMB, there are several AI applications that greatly impact public safety, such as risk assessment in criminal investigations, biometrics, and protection of critical infrastructure.

Smart cities projects is an important reason behind the growth in AI applications in the government sector because cities will increasingly rely on AI to control traffic systems, utilities, waste management and environmental monitoring. Such technologies help cities work more efficiently and improve the quality of life for their citizens thanks to real-time analysis of data. AI-powered IoT technologies have been making energy use in cities more efficient and easing traffic. For instance, a project was initiated by South Korea's Ministry of Land, Infrastructure, and Transport in 2026 in the name of 'AI City Innovation Technology Exploration Project', allocating 30 billion won for developing six AI technology projects valued at maximum 5 billion won each from sectors such as transportation, environment, security, city infrastructure, logistics, residential life, energy, health, and education.

AI in Government and Public Services Market Trends

Citizen services with AI assistance and virtual assistants are redefining the government's interaction with its citizens through constant automatic access to query handling, application management and grievances redressal services round-the-clock. They help to streamline processes reduce response time and reduce the administrative workload on public institutions. Governments are increasingly using chatbots and NPL technology to incorporate virtual assistants in portal services like tax filing identity documents and welfare plans. For instance, in April 2025 several public services departments increased the implementation of AI chatbots to respond to citizens' queries, decreasing reliance on call centers greatly. These solutions are anticipated to become the default mode of interaction in routine public services by 2026.

Generative AI adoption in public administration is emerging as a key trend, enabling governments to automate content creation, report generation, policy drafting, and document summarization. This improves efficiency and allows officials to focus on higher-value decision-making tasks. It also enhances data interpretation from large-scale public datasets. For instance, in July 2025, pilot programs in government agencies introduced generative AI tools to automate legal and administrative documentation workflows, reducing processing time significantly. By 2026, generative AI is expected to become deeply embedded in governance systems, particularly in administrative services and regulatory compliance functions.

Government cloud-based AI platforms are gaining significant popularity as public sector institutions adopt a scalable and secure solution for AI adoption. These platforms help to seamlessly integrate analytics, machine learning algorithms, and databases among different departments while ensuring interoperability between federal, state and local governments. For instance, in February 2026, several governments extended their secure sovereign cloud offerings to accommodate AI workloads for public sector services to increase scalability and cut down infrastructure costs.

AI-Based Cybersecurity and Threat Intelligence AI-enabled cybersecurity and threat intelligence represent one of the most prominent trends given that governments encounter cyberattacks on public infrastructure and important data systems with increasing regularity. By AI solutions, government institutions gain an ability to detect unusual behavior and threats as well as implement automatic response strategies. This helps to maintain national security as well as protect vital digital infrastructure. For instance, in November 2025, several cybersecurity organizations adopted AI-driven threat detection systems.

AI in Government and Public Services Market Analysis

Based on component, AI in government and public services market is divided into solution and services. Solution dominated the market, accounting for 65% in 2025 and are expected to grow at a CAGR of 18.8% through 2026 to 2035.

• The Solutions segment is increasingly shifting toward standardized AI platforms delivered via subscription models, replacing perpetual licensing. The governmental organizations favor platforms that have scaling options and security and provide continuous updates with compliance capabilities. The reason behind the mentioned trend is the growing popularity of the cloud and the increasing requirement for AI solutions to be integrated across various federal, state, and local entities.
• The current trend in terms of developing the technology solutions is to incorporate compliance, auditability, and explainability into design. The current regulations, as well as the trends in the U.S. and EU regarding AI use, dictate the need to integrate capabilities of monitoring AI usage, understanding how AI works, and having tools for content provenance verification.
• Consultation, implementation, and integration of AI solutions are becoming the major trends within the government adoption of AI technology. Due to the complexity of existing IT infrastructure, the lack of necessary skills, and fragmentation of data, government organizations are heavily relying on vendor-provided support.

Based on deployment mode, AI in government and public services market is segmented into cloud, on-premises and hybrid. Cloud segment dominates the market with 50.8% share in 2025, and the segment is expected to grow at a CAGR of 20.1% from 2026 to 2035.

• Governments are embracing sovereign cloud models, guaranteeing their sovereignty in matters regarding data residency, cybersecurity and regulation compliance, while still using cloud-based AI capabilities. This is mainly due to stringent regulations regarding data protection and national security concerns that push service providers to create localized infrastructures for government clouds.
• Clouds have been changing in recent times towards being an ecosystem of AI services, whereby governments can get machine learning capabilities, generative AI technology, and analytics services from cloud providers. It helps in lower the overhead costs involved in setting up the AI infrastructure as well as faster scaling of operations.
• Governments are also using on-premises solutions where there is a need for total control over data and systems. For security reasons, governments always prefer deploying in isolated environments. In such an environment, it is possible to manage security effectively as well as comply with the national security rules and regulations.
• Hybrid deployment is gradually shifting towards a workload-based deployment model, whereby governments deploy sensitive workloads on-premises while workloads that require scalability are deployed in cloud environments.

Based on technology, AI in government and public services market is segmented into machine learning & deep learning, natural language processing (NLP), image & video, robotic process automation (RPA) and Others. Machine learning & deep learning segment dominates the market with 40.8% share in 2025, and the segment is expected to grow at a CAGR of 18.9% from 2026 to 2035.

• Governments are increasingly prioritizing explainable machine learning models to ensure transparency, fairness, and accountability in decision-making processes such as fraud detection, immigration screening, and welfare distribution. This trend is driven by strict regulatory oversight and the need for auditability in public sector AI deployments.
• For instance, Machine learning's versatility enables applications across virtually all government functions. Canada's Immigration system AI triage processing over 7 million applications relies on machine learning classification algorithms predicting application complexity and fraud risk
• The use of natural language processing (NLP) has been expanding from information extraction to generative AI-driven chatbot and virtual assistants. The latter allows governments to interact with citizens in a more personalized manner in real time. They help in improving access and addressing citizen queries in an efficient manner.
• For instance, Canada's AgPal Chat uses generative AI based on large language models for natural language understanding of citizen funding inquiries, demonstrating how modern NLP enables intuitive interfaces that don't require citizens to understand complex government program structures. The U.S. Department of Health and Human Services' use of AI to extract information for poliovirus containment involves NLP processing of medical literature, surveillance reports, and epidemiological data
• There has been extensive adoption of computer vision for real-time monitoring of various systems such as public infrastructure, traffic systems, and security environments. Real-time video analytics help governments monitor and address concerns in a timely manner.
• RPA systems have developed into intelligent automation due to the introduction of machine learning and natural language processing in dealing with semi-structured and unstructured work.
• RPA's value in government stems from its ability to deliver automation benefits without requiring underlying system modernization, addressing the legacy infrastructure challenge identified by officials at 10 of 12 federal agencies. For instance, Canada's Public Services and Procurement AI Virtual Assistant automating pay-backlog case processing represents RPA combined with AI for intelligent document understanding.

Based on end use, AI in government and public services market is segmented into government agencies and public services organizations. Public services organizations segment is expected to dominate the market with a share of 58% in 2025.

• Government agencies are providing AI governance structures through Chief AI Officers, AI ethics committees and uniformed risk management processes to ensure accountability, transparency and compliance. The idea behind this development lies in increased regulatory compliance and need for a unified approach to governing AI. For instance, the U.S. federal government required all agencies to establish AI governance boards and conduct pre-deployment risk assessment of all high-risk AI systems in 2025.
• Government agencies have started using AI for the core operations like taxation, immigration, record keeping and regulatory enforcement to streamline processes. This has been contributing towards more efficient processes and lower manual workloads. For instance, Canada implemented an AI-based immigration triage system to review over 7 million applications in 2025.
• Public service providers such as health and social welfare institutions are increasingly using AI technology in their diagnoses and service deliveries to improve service delivery without putting too much pressure on the overworked system. For instance, in 2025, AI-based technologies have been adopted by the US Veterans Health Administration to improve the accuracy of diagnoses and patient workflow.
• Predictive AI technology has been adopted by public utility companies, universities, and infrastructure owners in the prediction of usage, maintenance, and energy distribution to improve service delivery and achieve sustainability objectives. For instance, in 2025, predictive AI technology has been used in several European public utilities to predict demand changes and distribute electricity accordingly.

U.S. AI in government and public services market reached USD 6.5 billion in 2025, with a CAGR of 20.1% from 2026 to 2035.

• U.S. is implementing structured AI governance through required federal guidelines, Chief AI Officers and AI Governance Boards to standardize AI implementation and provide accountability to AI application in the public sector.
  In April 2025, the Office of Management and Budget of the United States published M-25-21 to establish AI Governance Boards and Chief AI Officers within federal agencies.
• The utilization of AI is providing popular in U.S. governmental departments for the detection of fraud and prevention of improper payments through predictive analytics and anomaly detection.
• Governmental departments in the U.S. are utilizing AI-powered chatbots and automation tools to speed up and facilitate citizen services. AI implementation is increasing in cybersecurity and national defense operations.

North America dominated AI in government and public services market with a market size of USD 7.9 billion in 2025.

• North America is taking strides in adopting structured AI governance in form of federal mandate for AI governance boards, AI officers and AI compliance frameworks to ensure transparency and efficient scalability. For instance, The U.S. Office of Management and Budget released in 2025 M-25-21 to mandate federal agencies to establish an AI Governance Board and an AI Chief Officer.
• Governments are increasing AI adoption in detecting fraudulent activities, reduction in improper payments and financial oversight, which enhanced their accountability and prevented public sector losses through prediction and anomaly detection.
  For instance, in  2025, according to GAO, the U.S. government leveraged AI systems to deal with approximately $233–521 billion estimated annual losses due to fraud.
• Governments in North America have been increasing AI adoption in their citizens' service delivery by using chatbots, automated processing services and digital identity verification systems that increase efficiency. For instance, In 2025, Canada rolled out AI-driven immigration triaging system that processed over seven million applications.

Europe AI in government and public services market accounted for a share of 28% and generated revenue of USD 5.5 billion in 2025.

• European governments are focusing on adopting explainable and trustworthy AI systems to achieve fairness, accountability and promote public trust in AI-based automated decision systems, in risky use cases like healthcare and public services.
  Instance, By 2025, various governments within the EU implemented explainable AI systems in welfare distribution and administrative systems for greater transparency.
• Increasingly, European healthcare and social systems are implementing AI technology to optimize diagnostics, patients' health monitoring, resource distribution and even in public health initiatives. For instance, by 2026, the European Union had invested EUR 63.2 million into AI-enabled healthcare initiatives within member nations.
• EU nations have begun adopting AI systems across the bloc to foster interoperability and coordinated delivery of public services through digital governance initiatives. For instance, in 2025, cross-border AI data exchange was made possible by the efforts of EU digital programs towards integrated public services across member nations.

Germany dominates the AI in government and public services market, showcasing strong growth potential, with a CAGR of 19.7% from 2026 to 2035.

• The AI market in Germany is significantly driven by the regulatory policies of the EU, which mandate the development of explainable, transparent and risk-categorized AI tools that can be used across government departments and public administration tasks. For instance, in February 2026, German public administration bodies started implementing EU AI Act rules regarding transparency in AI-supported administrative decision-making.
• Leveraging the expertise in industries Germany is focusing on AI integration into municipal and transport services along with infrastructure management.
  For instance, in April 2025, German cities have integrated AI-powered traffic management solutions aimed at mitigating congestion and reducing environmental pollution.
• AI is being used by Germany to enhance smart mobility initiatives and perform predictive maintenance and monitoring of infrastructure.
  In July 2025, German transportation authorities have deployed AI-powered solutions to facilitate rail infrastructure predictive maintenance processes.
• Government organizations are implementing AI solutions to enhance the efficiency of administrative processes and minimize paper usage.
  In January 2026, German governmental organizations have expanded the implementation of AI-powered solutions for digital administration.

The Asia Pacific AI in government and public services market is anticipated to grow at the highest CAGR of 20.8% from 2026 to 2035 and generated revenue of USD 4.9 billion in 2025.

• Asia Pacific governments are rapidly deploying AI in smart city initiatives to optimize transportation, energy management, infrastructure monitoring, and public safety, supporting large-scale urban transformation and efficiency improvements. For instance, in 2025, South Korea launched its AI City Innovation program investing in AI solutions for transport, safety, and environmental management systems.
• APAC countries are accelerating digital government transformation using AI to automate public services, reduce bureaucracy, and enhance citizen engagement through intelligent platforms and data-driven systems. For instance, in 2025, India expanded AI-based digital systems for tax processing and identity verification across multiple government departments.
• AI is increasingly used in APAC for surveillance, traffic monitoring, and urban governance, enabling governments to manage large populations and improve security through real-time analytics. For instance, in 2025, China expanded AI-powered surveillance systems across major cities to enhance public safety and urban management.

China AI in government and public services market is estimated to grow with a CAGR of 21.8% from 2026 to 2035.

• China is using AI into its governance infrastructure, including surveillance, urban administration, and public service delivery systems through central planning and governmental investments. In 2025, the Chinese cities upgraded their AI-powered surveillance systems to monitor urban activity and ensure effective public safety management.
• The implementation of AI in China's smart cities projects is common in optimizing transportation, energy, and other resources' efficiency. In March 2025, Shanghai introduced an AI-based system of traffic management to address mobility issues.
• AI introduced in governmental security systems for monitoring, facial recognition, and predicting crimes to enhance public safety measures.
  In August 2025, the Chinese authorities upgraded their public security systems based on AI technologies at major transport facilities to ensure safety.
• AI is used by governmental organizations to provide efficient digital governance systems. China upgraded its AI-powered digital government websites for automatic public services delivery.

Latin America AI in government and public services market shows lucrative growth over the forecast period.

• Latin America is rapidly adopting cloud-based AI platforms to modernize public services, overcome infrastructure limitations, and improve efficiency in government operations through scalable digital solutions. For instance, Brazil implemented cloud-based AI systems to automate tax processing and improve citizen service delivery across public departments.
• AI-driven smart city initiatives are improving urban mobility, infrastructure planning, and public safety across Latin American cities, supporting better governance and resource management. For instance, in 2025, Mexico deployed AI-based traffic management systems to optimize urban transportation and reduce congestion in major cities.
• Governments are increasingly using AI to automate administrative processes, reducing paperwork, improving service delivery speed, and enhancing citizen engagement in public services. Argentina launched AI-powered citizen service platforms to automate government interactions and reduce processing delays.
• Latin American governments are collaborating with private technology firms to accelerate AI adoption, improve digital infrastructure, and expand innovation in public services.
• Latin America exhibits opportunities including potential to leapfrog legacy systems through cloud-based AI platforms avoiding on-premises infrastructure investment, growing technology sectors in countries like Brazil, Argentina, and Mexico, increasing urbanization creating smart city needs, and gradual improvement in digital government capabilities

Brazil AI in government and public services market is estimated to grow with a CAGR of 17.9% from 2026 to 2035 and reach USD 1.1 billion in 2035.

• Brazilian government is using cloud AI platforms for public services and cut infrastructure dependencies and enhance efficiency in governmental operations. In 2025, Brazil implemented cloud-based for automation of taxation and service optimization.
• Trend for digitizing public service automation There has been an upsurge in using AI technologies in Brazil to use administrative procedures and cut processing delays in public services delivery systems. In July 2025, Brazilian agencies implemented AI-enabled digital portals for handling of citizens' services and documents.
• Brazilian authorities are embedding AI-powered solutions to facilitate smart cities development with improved traffic management and other functions.
  For instance, Sao Paulo launched AI-powered traffic monitoring system to improve urban traffic flow.
• In Brazil, government has been enhancing its cooperation with technology companies to implement more AI solutions. Brazil expanded PPP programs for AI-based public administration platforms.

Middle East and Africa AI in government and public services market accounted for USD 0.8 billion in 2025 and is anticipated to show lucrative growth over the forecast period.

• MEA countries are focusing on sovereign AI strategies to ensure control over data, infrastructure, and AI systems, strengthening national security and digital independence across government operations. For instance, Saudi Arabia advanced its Vision 2030 program by integrating AI into national governance and smart infrastructure projects.
• Governments in MEA are investing heavily in smart city mega projects to transform urban infrastructure, improve mobility, and enhance citizen services using AI technologies.
• AI is being widely adopted in MEA to modernize government services through automation, digital platforms, and improved citizen engagement systems.
• MEA governments are investing in sovereign cloud infrastructure and digital platforms to support AI adoption across public sector operations and smart governance systems. For instance, GCC countries expanded sovereign cloud infrastructure to host AI workloads for government digital transformation programs.
• The rest of MEA comprising Saudi Arabia, other GCC countries, South Africa, and Sub-Saharan Africa region shows remarkable diversity ranging from digitally advanced GCC nations to technologically underdeveloped nations.
• The AI initiatives in Saudi Arabia’s smart cities indicate that this region shows potential for becoming an emerging center of demand. Sub-Saharan Africa experiences some of the most serious issues, yet it displays ingenuity in government services provided through mobile technologies and possesses AI capability to deal with developmental problems.

UAE market is expected to experience substantial growth in the Middle East and Africa AI in government and public services market, with a CAGR of 13.7% from 2026 to 2035.

• The UAE is advancing sovereign AI strategies to strengthen digital independence, enhance governance capabilities, and position itself as a global AI hub through national programs. The UAE expanded its national AI strategy under Vision 2031 for integrated government services.
• The UAE is a global leader in smart city development, using AI for mobility, infrastructure, and public service automation in urban centers like Dubai.
• For instance, Dubai expanded AI-based smart governance systems for municipal service automation.
• AI is widely deployed across UAE ministries to automate workflows, enhance citizen engagement, and improve service efficiency government agencies implemented AI-powered virtual assistants for citizen service portals.
• The UAE is investing in sovereign cloud infrastructure to support AI workloads and enable secure, scalable government digital transformation. In February 2026, UAE expanded sovereign cloud platforms for hosting government AI applications and data systems.

 

AI in Government and Public Services Market Share

• The top 7 companies in market are Microsoft, Accenture, Booz Allen Hamilton, AWS (Amazon), Leidos, Palantir and IBM, contributing 51% of the market in 2025.
• Microsoft develops a comprehensive ecosystem to introducing technology across government processes. The integration of Azure cloud services, Microsoft 365 Copilot, Dynamics 365 and Power Platform creates a cohesive AI environment that helps governments automate their processes, make decisions effectively, and deliver better citizen service. Ecosystem approach eliminates fragmentation of information flows, helping to ensure effective collaboration across departments, productivity increases and effective data exchange. The development of Canada's Federal AI strategy based on Copilot and Teams AI exemplifies practical usage in government processes.
• Accenture is one of the key players contributing to AI implementation through full-cycle AI transformation of government processes including strategy consulting, system integration, deployment, and managed services. This approach makes it possible for governments to introduce modern technologies and integrate AI into different departments' operations. Thus, the company plays a critical role in bridging the gap between providers and government organizations needs and requirements. Accenture's participation in digital transformation projects of state governments of the U.S. illustrates its influence.
• Booz Allen Hamilton makes use of AI-based applications extensively for their defense and national security programs. They develop AI systems that are vital for threat detections, analysis of intelligence information, and decision-making for military operations. The extensive capability of Booz Allen Hamilton for securing high levels of security clearances allows them to function in high-level classified settings. This reflects the importance of AI-powered intelligence analytics systems for defense agencies for their threat detection and situational awareness activities.
• Amazon Web Services (AWS) has made efforts to create government-oriented cloud environments by creating AWS GovCloud to allow secure and scalable AI deployment for governmental operations. AWS GovCloud offers a highly efficient cloud computing system to enable governmental agencies to perform mission-critical operations while maintaining security standards and compliance regulations. AWS is enabling governments to access AI capabilities on demand through AI-as-a-Service models such as Amazon SageMaker and Bedrock. AWS is helping governments modernize legacy IT systems using cloud-native AI architectures that improve efficiency, scalability, and operational agility. This enables gradual migration from outdated infrastructure to modern digital platforms without disruption.
• Leidos is aiming at enhancing operational efficiency and decision-making through integration in the defense, civil, and health sectors. The firm's key focus on leveraging its systems engineering capabilities together with AI technologies will be instrumental in ensuring the success of the implementation process. Leidos is exploring how to expand the applications of AI in the defense and intelligence sectors as part of surveillance, analysis, and mission support roles. AI is being applied by Leidos in the government public healthcare system to ensure automated claims processing, advanced diagnostics, and effective patient management. This ensures increased efficiency in government healthcare systems as well as reduced workload through intelligent process automation and predictive healthcare analytics.
• Palantir is applying AI technologies to transform legacy government IT systems in terms of interoperability. Palantir is helping governments to develop an integrated platform for multi-source data management through AI for intelligence and decision-making purposes. The company provides AI systems designed for managing very complex data environments in the context of high levels of security and real-time data analysis. Palantir is focusing on AI systems that leverage machine intelligence together with human oversight to boost decision-making accuracy in the government sector.
• IBM is enabling government AI adoption through hybrid cloud architectures that integrate on-premises, cloud, and edge environments for flexible deployment. This supports secure and scalable AI modernization across public sector systems. IBM is focusing on developing explainable and trustworthy AI systems aligned with government requirements for transparency, fairness, and accountability in decision-making processes. These systems ensure interpretability in sensitive public sector applications. Watson AI deployments in public healthcare systems demonstrate IBM’s contribution to enabling explainable AI models that support regulatory compliance and enhance trust in automated decision systems.

AI in Government and Public Services Market Companies

Major players operating in the AI in government and public services industry are:

• Accenture
• AWS (Amazon)
• Booz Allen Hamilton
• Google (Alphabet)
• IBM
• Leidos
• Microsoft
• OpenAI
• Palantir
• SAIC

 

• The market trend indicates the potential for consolidation because the most dominant cloud platforms and system integrators will be acquiring specialized AI capabilities, yet there will be more fragmentation due to new AI techniques that provide chances for new vendors to innovate. Since the U.S. government focuses on the competitive environment in terms of procurement and vendor lock-in, market consolidation could be minimized. The regulations in the EU AI Act to support small businesses' access to regulatory sandboxes and simplified compliance could contribute to fostering European AI vendors.
• In terms of recent strategic moves, the following activities have been observed: competition among governments, technology companies, and consulting firms for skilled AI professionals; generative AI arms race among each major competitor who incorporates the capability of large language models; increased mergers and acquisitions of specialized AI capabilities; alliances forming among competitors who realize that it is impossible for a vendor alone to dominate the whole AI stack; attention to responsible AI where vendors develop tools to detect bias, explainability, and governance to address government requirements; investments in quantum computing for future use by the government; and development of edge AI.

AI in Government and Public Services Industry News

• In April 2026, The European Commission allocated EUR 63.2 million to accelerate AI innovation in healthcare delivery and online safety systems while aligning with EU AI Act requirements. The initiative supports development of compliant AI solutions for critical public services and strengthens vendor opportunities in regulated European markets.
• In March 2026, NIST released updated guidelines for protecting AI systems against adversarial threats such as data poisoning and model theft. The framework integrates AI security with cybersecurity standards, helping U.S. government agencies strengthen risk management and meet federal AI compliance requirements under OMB directives.
• In February 2026, South Korea launched a 30 billion won AI City Innovation Project to deploy AI across transportation, safety, energy, and urban services. The initiative enables large-scale smart city demonstrations and strengthens commercialization pathways for AI vendors targeting urban governance solutions.
• In November 2025, The EU introduced AI Act simplification reforms enhancing enforcement, expanding regulatory sandbox access, and reducing compliance burdens for small firms. The changes maintain risk-based governance while improving innovation flexibility and strengthening oversight of advanced AI systems across Europe.
• In August 2025, The EU implemented GPAI regulations covering foundation models, requiring transparency, copyright compliance, and risk management. These rules ensure AI systems used in government applications meet strict European standards for accountability, safety, and disclosure of training data practices.

The AI in government and public services market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) from 2022 to 2035, for the following segments:

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Market, By Offering

• Solution
  • AI Software Platforms
  • Embedded Intelligence Systems
  • Packaged Government AI Solutions 
• Services
  • Consulting & Advisory
  • System Integration & Deployment
  • Training & Education
  • Support & Maintenance

Market, By Technology

• Machine Learning & Deep Learning
• Natural Language Processing (NLP)
• Image & Video
• Robotic Process Automation (RPA)
• Others

Market, By Deployment Mode

• Cloud
• On-premises
• Hybrid

Market, By Application

• Citizen Services & Engagement
  • Digital Assistants & Chatbots for Public Queries
  • Multilingual Translation for Public Communication
  • Personalized Government Portals
• Public Safety & Security
  • Surveillance & Monitoring
  • Crime Prediction & Analysis
  • Emergency Response Systems
• Healthcare & Social Services
  • Disease Prediction & Outbreak Control
  • Smart Resource Allocation (hospitals, clinics)
  • Benefits & Welfare Distribution Monitoring
• Defense & National Security
  • Threat Detection & Analysis
  • AI-driven Cybersecurity Systems
  • Military Decision Support Systems
• Administrative Efficiency
• Smart Cities & Urban Management
• Others

Market, By End Use

• Government Agencies
  • Federal/National Government
  • State/Provincial Government
  • Local/Municipal Government
• Public Services Organizations
  • Transportation Authorities
  • Social Welfare Organizations
  • Public Healthcare Systems
  • Utilities Providers

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Poland
  • Romania
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Singapore
  • Indonesia
  • Thailand
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • South Africa
  • Saudi Arabia
  • UAE