The global market for artificial intelligence in government and public services is projected to grow from USD 26.4 billion in 2025 to USD 135.7 billion by 2035. This fivefold increase, at a compound annual growth rate of 17.8 per cent, reflects accelerating digital transformation across government operations worldwide.

Governments are increasingly adopting AI to automate citizen-facing services, improve efficiency and boost transparency. Public agencies are using the technology to streamline processes, optimise resources and enhance engagement. This surge aligns with digital government agendas and investment in smart infrastructure, particularly across North America, Asia Pacific and Europe.

Government bodies are set to account for 65 per cent of AI adoption in 2025, driven by large-scale digital transformation and demand for efficient, accessible services. Key applications include citizen service automation, fraud detection, policy analysis and resource planning.

Cloud-based AI platforms are expected to account for 57 per cent of market demand by 2025. Their flexibility and scalability suit the needs of public sector organisations, supported by national cloud-first policies and compliance frameworks tailored to government standards.

Public safety and security is the largest application segment, representing 40 per cent of market value in 2025. Governments are using AI for threat detection, emergency response, predictive policing and cybersecurity. National security investment continues to fuel innovation in this space.

China leads the market with a projected 24 per cent growth rate, supported by state-led smart city programmes and rapid AI deployment. India follows with 22.3 per cent growth, underpinned by the Digital India initiative and a focus on inclusive governance.

Germany is growing at 20.5 per cent, driven by digital administration reforms, while France sees 18.7 per cent growth, with public sector innovation and AI sovereignty high on the agenda. The UK is expected to grow at 16.9 per cent, reflecting its commitment to data-driven governance and GovTech. The US, with a 15.1 per cent rate, is focusing on ethical AI and citizen privacy through federal and state-level programmes.

Major players include Microsoft, IBM, Google and Accenture, alongside specialist firms such as Palantir Technologies and C3.ai. These companies are developing secure, scalable AI solutions tailored to the needs of public bodies.

Challenges remain, including regulatory complexity, data privacy and institutional resistance. However, ongoing innovation in AI governance is helping governments improve service access, resilience and transparency.

Notable trends include the use of predictive analytics in policymaking and the rise of AI-powered virtual assistants, offering 24/7 access to government services. As adoption grows, AI is set to underpin a smarter, more inclusive approach to public service delivery, with the UK among the nations leading this global shift.

Created by Amplify: AI-augmented, human-curated content.