More than half of government Chief Information Officers (CIOs) anticipate their IT budgets will rise in 2026, driven by increasing demand for artificial intelligence (AI) and other digital technologies despite ongoing fiscal constraints, according to recent industry research.
A survey of 284 government CIOs revealed that 52% expect specific budget increases for AI and related innovations, underscoring a continued commitment to digital transformation within the public sector.
Key investment priorities include cybersecurity, which 85% of CIOs identified as a top area for funding, followed by AI and generative AI at 80%, and cloud platforms at 76%. The data suggests that governments remain focused on digital initiatives that can deliver measurable improvements in public service delivery. CIOs are under pressure to justify expenditures by demonstrating how technology projects align with mission objectives such as cost savings and enhanced user experiences.
A significant 74% of government CIOs reported that they have already deployed or plan to deploy AI solutions within the next year. Interest in generative AI is particularly high, with 78% indicating current or imminent deployment plans. Nearly half (49%) also plan to introduce AI agents, such as digital assistants, in the coming 12 months.
Boosting internal productivity is the leading priority for government CIOs in 2026, with 51% focusing on increasing employee output. Launching new digital products and services ranks second at 38%, closely followed by efforts to enhance citizen experience at 37%.
