Government IT Spending Set to Rise Next Year as AI Priorities Strengthen

According to the latest survey from Gartner, 52 percent of non-US government CIOs expect IT budgets to rise in 2026.

The survey, conducted between May and June 2025 among 2,501 technology executives – including 284 from government – suggests that many public-sector organisations are doubling down on digital investment despite fiscal uncertainty.

“Geopolitical shifts and economic volatility are forcing government CIOs to rapidly adjust their priorities for next year,” said Gartner analyst Arthur Mickoleit, adding that the pressure is on to ensure every pound spent delivers mission-critical results.

Where The Money is Going — AI, Cloud And Cybersecurity Top the List

Cybersecurity (85 percent), AI (80 percent), generative AI (80 percent) and cloud platforms (76 percent) emerged as the top spending priorities in 2026.

AI uptake is set to accelerate rapidly: 74 percent of respondents have already deployed or plan to deploy AI within the next 12 months, with generative AI close behind at 78 percent. Nearly 49 percent plan to introduce AI-powered agents such as digital assistants in the same timeframe.

Mickoleit cautioned that while “agentic AI” is driving huge interest, CIOs must look beyond hype and remember the reliability and value of established tools such as machine learning and process automation.

Productivity, Citizen Experience and Vendor Strategies in Focus

More than 51 percent of government CIOs say boosting internal employee productivity is their top priority for 2026. Other goals include launching new digital services and products (38 percent) and improving citizen experience (37 percent).

Governments are also re-evaluating procurement strategies as geopolitics shifts. Around 55 percent of CIOs expect to reshape their relationships with technology providers, while 39 percent plan to favour vendors based in their own region to mitigate digital sovereignty risks.