Governments Anticipate Increased Tech Budgets by 2026: 52% of Officials Expect Funding Boost

Government IT leaders are planning major budget increases for 2026, with cybersecurity and artificial intelligence topping their spending priorities. A new Gartner study found that 52% of government CIOs expect their IT budgets to grow next year, despite ongoing financial pressures across the public sector.

The numbers tell a clear story about where governments see the future. Cybersecurity leads the pack, with 85% of IT chiefs planning to boost their investments. AI and generative AI both come in at 80%, while cloud computing platforms follow at 76%.

This shift comes as governments worldwide face mounting pressure to modernize public services while dealing with budget constraints. The study, which surveyed 2,501 participants including 284 government IT leaders outside the US, shows how geopolitical tensions and economic uncertainty are reshaping technology priorities.

Arthur Mickoleit, a director analyst at Gartner, explains that IT leaders are being forced to quickly reset their priorities. They need to show real impact from technology investments - whether that's cutting costs, improving user experience, or boosting operational efficiency.

The AI adoption numbers are striking. About 74% of government IT leaders have either already implemented AI solutions or plan to do so within the next 12 months. For generative AI, that figure jumps to 78%. Nearly half (49%) are working with or planning to deploy AI agents.

But there's a catch. Mickoleit warns that all the excitement around new AI technologies might distract from more mature tools like machine learning and process automation that could deliver immediate benefits. Governments have spent years investing in digital transformation, and this next wave of innovation could be key to actually delivering on those promises.

The priorities for 2026 reflect this practical focus. About 51% of government IT leaders want to boost employee productivity first. Creating new digital products and services comes second at 38%, followed by improving citizen experience at 37%.

Geopolitical tensions are also reshaping how governments think about technology partnerships. More than half (55%) of IT leaders expect to change their relationships with tech vendors due to these pressures and growing concerns about digital sovereignty. For 39% of officials, a vendor's geographic location now matters as much as cost and capability when making purchasing decisions.

This trend toward local tech partnerships reflects broader concerns about maintaining stable government services and secure technology operations. As digital sovereignty becomes a bigger issue, governments are looking to reduce their dependence on foreign technology providers.

The study suggests we're at a turning point for government technology. After years of talking about digital transformation, agencies now have the budget momentum and political pressure to make it happen. The question isn't whether governments will invest more in technology - it's whether they can do it smart enough to actually improve how they serve citizens.