As generative AI (GenAI) continues to reshape how organizations deliver services, the public sector is making bold strides toward adoption. According to Nutanix’s seventh annual Public Sector Enterprise Cloud Index (ECI), an overwhelming 83% of public sector entities have already defined a GenAI strategy, with more than half actively implementing GenAI solutions. However, the report also highlights significant roadblocks—chief among them: outdated infrastructure, cybersecurity concerns, and a shortage of skilled personnel.
The study, conducted by Vanson Bourne and based on input from 1,500 global IT leaders, shows that GenAI is no longer a futuristic concept for public agencies. In fact, 94% of public sector organizations are already leveraging GenAI for practical use cases such as chatbots, content generation, and internal process automation—driven by the promise of improved productivity and efficiency.
“Generative AI is already transforming how we work,” said Greg O’Connell, VP, Federal Sales, Public Sector at Nutanix. “Public sector leaders expect tangible returns within a year, but the path to value starts with addressing foundational challenges like infrastructure modernization, data security, and workforce readiness.”
Infrastructure Modernization: The Cornerstone of AI Readiness
Despite strong interest in GenAI, 76% of public sector respondents admit their current infrastructure is ill-equipped to support cloud-native applications at scale. The need for high-performance, secure, and resilient IT systems has pushed infrastructure investment to the top of the public sector’s modernization agenda.
GenAI workloads require environments capable of handling vast datasets with integrity, speed, and compliance. However, many agencies still operate on legacy systems that lack the flexibility and robustness needed for enterprise-level AI deployment.
Security and Privacy: A Rising Priority
The rapid pace of GenAI deployment has exposed new security vulnerabilities. Nearly all public sector respondents (92%) believe their organizations must do more to secure GenAI models and applications. Moreover, 96% acknowledge that GenAI is driving a cultural shift, where data security and privacy are becoming central to strategic planning.
This heightened focus on cybersecurity is timely. As GenAI models process sensitive citizen data, public trust will hinge on how governments protect that data from misuse or breaches.
Upskilling the Workforce: A Critical Enabler
While technology is moving fast, the skills gap is proving to be a bottleneck. Surveyed leaders cite the urgent need for workforce development to support GenAI initiatives. Hiring for AI-focused roles and providing training for existing employees is now considered critical for long-term success.
Beyond technical expertise, public sector organizations also face organizational inertia—where navigating policy, procurement, and compliance challenges may slow GenAI progress unless change management is prioritized.
Containerization and Cloud-Native Tech on the Rise
In response to the need for scalable, flexible platforms, the public sector is rapidly adopting application containerization and Kubernetes. According to the report, 96% of respondents are in the process of containerizing applications, while 91% agree that their organizations are already reaping the benefits of cloud-native technologies.
This shift is seen as a necessary precursor to full-fledged GenAI deployment, enabling faster innovation cycles and improved system resilience.
Nutanix’s latest report underscores a critical juncture for the public sector. While enthusiasm for GenAI is high and initial use cases are proving successful, real transformation will depend on how well organizations can close gaps in infrastructure, security, and skills.
The call to action is clear: governments must invest not only in technology, but in the people and processes that enable it. Only then can GenAI deliver on its full promise—driving smarter, more responsive public services for the digital age.