A recent report by the Capgemini Research Institute finds that 90% of public sector organizations plan to explore, test, or implement agentic AI technologies within the next two to three years. While nearly two-thirds have already engaged with generative AI, many face substantial barriers in data management, compliance, and trust. Conducted between December 2024 and January 2025, the study surveyed 700 executives from 350 public sector organizations

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across several regions and government levels. Sectors like defense, healthcare, and security report the highest levels of engagement. Yet, only 21% of respondents believe they currently have adequate data to effectively train and adapt AI models. In the EU, just 36% of organizations feel ready to meet the standards of the EU AI Act. Concerns about data security, cited by 79%, and trust in AI outputs, noted by 74%, remain top challenges.

Despite these hurdles, governments are recognizing the importance of structured data systems and leadership roles focused on data and AI. Marc Reinhardt, Public Sector Global Industry Leader at Capgemini, highlighted, “With rising citizen demands and stretched resources, public sector organizations recognize the ways in which AI can help them do more with less. However, the ability to deploy Gen AI and agentic AI depends on having rock-solid data foundations.” He further added that governments can boost efficiency with AI support, but must first establish a strong data infrastructure and governance. The report emphasizes that progress in AI adoption depends on improved data foundations, stronger governance frameworks, and better data-sharing mechanisms.

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