Global Agentic AI Government Market Size By Product Type (Ready-to-Deploy Agents, Build-Your-Own Agents), By Application Area (Citizen Services, Public Procurement, Healthcare Management, Urban Infrastructure, Others), By Deployment Model (On-Premises, Cloud-Based), Region and Companies – Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2025-2034

Report Overview

The Agentic AI Government Market size is expected to be worth around USD 47.6 Billion By 2034, from USD 1.5 billion in 2024, growing at a CAGR of 41.7% during the forecast period from 2025 to 2034. In 2024, North America held a dominant market position, capturing more than a 40.9% share, holding USD 0.6 Billion revenue.

The market for Agentic AI in government is on a growth trajectory, driven by its potential to streamline operations and improve public services. The adoption of agentic AI is expected to expand as governments seek solutions for efficient data processing, resource management, and automated decision-making. This expansion is partly fueled by technological advancements that make AI systems more capable and reliable.

The primary drivers of the Agentic AI market in government include the pressing need for automation to address workforce shortages and the demand for improved public sector services. Governments are seeking solutions that can streamline operations and reduce the burden on human employees, allowing them to focus on more strategic and critical activities.

According to Market.us, the Agentic AI Market is projected to reach USD 196.6 billion by 2034, growing from USD 5.2 billion in 2024 at a CAGR of 43.8%. North America currently dominates this space, holding over 38% market share with a revenue of USD 1.97 billion in 2024. The US market alone contributed USD 1.58 billion, growing at a CAGR of 43.6%.

According to Salesforce, 90% of global constituents are open to using AI-powered agents for government services, recognizing benefits like 24/7 accessibility, faster responses, and simplified interactions. Countries such as Brazil, Spain, Singapore, and Italy are leading in AI adoption for public governance. However, with 40% of people struggling to interact with government services, the need for streamlined digital solutions is becoming more urgent.

Key Takeaways

• The Ready-to-Deploy Agents segment dominated the Global Agentic AI Government Market in 2024, securing a 56.7% market share.
• The Healthcare Management sector also held a strong position, capturing over 34.8% of the market.
• In terms of deployment, the On-Premises model was the clear leader, accounting for more than 67.2% of the total market.
• The U.S. Agentic AI Government Market reached a valuation of USD 513.5 billion in 2024, showing an impressive CAGR of 40.7%.
• North America maintained its dominance in 2023, holding a 40.9% share of the global market.
• The U.S. government allocated $1.8 billion in its 2023 budget for nondefense AI research and development, supporting AI-driven security and data analysis initiatives.
• Meanwhile, the UK government committed £25 billion in new investments to expand AI data centers and infrastructure.

Analysts’ Viewpoint

The agentic AI market in the government sector is projected to grow significantly. One key trend is the increasing integration of AI in areas like public safety and healthcare, where quick, autonomous decision-making can greatly enhance service delivery and crisis response. Another trend is the ethical use of AI, with increasing discussions on regulations to ensure these systems are used responsibly.

Adoption rates of agentic AI in government are increasing as the technology proves its value in enhancing operational efficiency and reducing costs. There is a high demand for AI systems that can autonomously manage routine tasks and complex decision-making processes, allowing human employees to focus on more strategic activities.

The market for agentic AI in government presents significant investment opportunities, particularly in developing AI systems tailored for specific public sector needs such as transportation, healthcare, and security. Investors are particularly interested in startups and companies developing AI solutions that can be integrated into public infrastructure to improve efficiency and resilience.

U.S. Agentic AI Government Market Size

The US Agentic AI Government Market was valued at USD 513.5 million in 2024, with a robust CAGR of 40.7%. The US region has a robust technological infrastructure that supports the development and deployment of advanced AI systems. there is also a substantial investment in AI research and development, both from the government and the private sector.

For instance, according to USPTO, The U.S. government has allocated approximately $1 billion annually to support AI research, development, and deployment across various sectors. Moreover, the US is a home to various leading technology companies and research institutions that drives the innovation in AI technologies.

In 2024, North America held a dominant market position in the Agentic AI government sector, capturing more than a 40.9% share with revenues reaching approximately USD 0.6 Billion. This leadership can be attributed to several key factors that underscore the region’s advanced technological infrastructure and proactive governmental policies in adopting innovative AI solutions.

Firstly, North America, particularly the United States and Canada, has a robust technological ecosystem supported by substantial investments in research and development from both public and private sectors. This investment has facilitated groundbreaking advancements in AI technologies, including those in the Agentic AI field.

Secondly, the presence of major Agentic AI companies and startups in North America has propelled the region to the forefront of the Agentic AI market. These companies not only drive innovation through extensive research but also collaborate closely with government agencies to develop tailored AI solutions that address unique public sector challenges.

Product Type Analysis

In 2024, the Ready-to-Deploy Agents segment held a dominant market position in the Agentic AI government market, capturing more than a 56.7% share. This leadership stems from several key factors that emphasize ease of integration, cost efficiency, and immediate operational benefits provided by these solutions.

Ready-to-Deploy Agents are favored primarily due to their ease of implementation. Organizations, especially within the government sector, can quickly deploy these agents with minimal setup time, allowing for rapid integration into existing systems. This immediacy is critical in environments where time and ease of integration are crucial for the adoption of new technologies.

Moreover, these agents come equipped with pre-built functionalities tailored to common tasks in government operations, such as data processing and routine administrative tasks, which streamlines the transition process and reduces the need for extensive customization.

Cost efficiency also plays a significant role in their dominance. Ready-to-Deploy Agents generally require less upfront investment compared to building custom solutions from scratch. This lower cost barrier makes them particularly attractive to government agencies that must adhere to strict budget constraints. By reducing the need for significant initial expenditure, these agencies can allocate resources more effectively across their operations.

Furthermore, the operational benefits of Ready-to-Deploy Agents are immediately observable. These agents automate various administrative tasks, thereby freeing up human resources to focus on more complex issues that require human oversight. This not only improves operational efficiency but also enhances service delivery by reducing the time spent on routine tasks.

Application Area Analysis

In 2024, the Healthcare Management segment of the Agentic AI in government market held a dominant position, capturing more than a 34.8% share. This prominence in the market can be attributed to several compelling factors that highlight the critical role of Agentic AI in transforming healthcare services.

The integration of Agentic AI in healthcare has been pivotal in enhancing diagnostic accuracy and the efficiency of administrative operations. With the ability to process and analyze vast amounts of medical data at unprecedented speeds, AI agents have become instrumental in improving diagnostic precision and reducing the incidences of misdiagnoses, which are crucial for patient safety and treatment efficacy​.

Moreover, Agentic AI has significantly alleviated the administrative load on healthcare facilities. By automating routine tasks such as patient scheduling, billing, and follow-ups, AI agents enable healthcare staff to dedicate more time to patient care, thus improving service delivery and operational efficiency​. This automation is expected to save the U.S. healthcare industry up to $150 billion annually by 2026​.

Another driving factor for the dominance of this segment is the increasing implementation of AI in personalized patient care and remote monitoring. AI technologies are tailored to enhance patient engagement and treatment outcomes by providing continuous monitoring and personalized healthcare interventions, which are particularly beneficial for managing chronic diseases​.

Deployment Mode  Analysis

In 2024, the On-Premises segment held a dominant market position in the Agentic AI government sector, capturing more than a 67.2% share. This substantial market share is primarily due to several key advantages that on-premises deployment offers, particularly in terms of security, control, and compliance with regulatory standards, which are crucial for government applications.

On-premises deployment provides government agencies with complete control over their infrastructure and data. This control is vital in handling sensitive information, where security and data privacy are paramount. The ability to physically secure the infrastructure and directly manage the data handling and storage processes reassures agencies against the risks of data breaches and unauthorized access, which are more challenging to mitigate in cloud environments.

Moreover, on-premises solutions enable tighter integration with existing legacy systems commonly used in government sectors. This integration is essential for maintaining continuity of operations and ensuring that new AI capabilities augment rather than disrupt existing workflows. The customization potential of on-premises AI systems allows for tailored configurations that align closely with specific governmental requirements and operational protocols.

Additionally, while on-premises deployments require a significant initial investment in infrastructure, this can be offset by the long-term benefits of having a stable and predictable cost model, without the ongoing operational expenses associated with cloud services. This financial predictability is often a critical factor in government budgeting and financial planning.

Key Market Segments

By Product Type

• Ready-to-Deploy Agents
• Build-Your-Own Agents

By Application Area

• Citizen Services
• Public Procurement
• Healthcare Management
• Urban Infrastructure
• Others

By Deployment Model

• On-Premises
• Cloud-Based

Drivers

Increasing demand for automation across governments

The increasing demand for automation across governments is a significant driver for the agentic AI government market. governments are under constant pressure to delivery services more efficiently. Automation through agentic AI can streamline processes, reduce manual tasks, and increase the productivity. This leads to quicker service delivery and better resource management.

Moreover, Agentic AI systems can perform tasks with high accuracy and consistency, reducing the likelihood of human error. For instance, according to NIST, AI systems achieved an accuracy rate of 99.7%, significantly higher than the average human accuracy rate of 95%. This is particularly important in critical areas such as tax processing, public safety and regulatory compliance.

Restraint

High Implementation Costs

One significant barrier to the widespread adoption of agentic AI in government operations is the high cost associated with its implementation. Deploying sophisticated AI solutions necessitates substantial initial investments in technology infrastructure, software development, and system integration.

Additionally, ongoing expenses related to training personnel and maintaining the AI systems further escalate the financial burden. These costs can be prohibitive, especially for underfunded public sectors, potentially stifling the deployment of agentic AI technologies despite their potential benefits​

Opportunities

Enhanced Public Engagement and Transparency

Agentic AI presents a substantial opportunity to transform public engagement by making governmental processes more transparent and accessible to citizens. AI agents such as chatbots can provide instant responses to public inquiries, significantly reducing wait times and improving overall citizen satisfaction.

Furthermore, these agents facilitate a higher degree of transparency by enabling easier access to information and simplifying the complexities of governmental procedures. This not only helps in building trust among the populace but also encourages a more informed and engaged citizenry

Challenges

Ethical and Privacy Concerns

The integration of agentic AI into public sectors also introduces substantial challenges, particularly concerning ethics and privacy. The ability of AI agents to process and store vast amounts of personal data raises significant privacy concerns, necessitating stringent measures to protect sensitive information.

Additionally, the autonomous nature of these agents calls for robust ethical guidelines to prevent biases in AI-driven decisions and ensure that they align with public interests and legal standards. Addressing these concerns is crucial for maintaining public trust and ensuring the responsible use of AI in governance​

Growth Factors

The exponential growing of data generated by various government departments and public services provides a rich source of information for AI systems to analyze and service insights, improving decision making and service delivery.

Additionally, the agentic AI systems can enhance transparency and accountability in government operations by providing data driven insights and reducing human biases in decision making processes. This also contributes to the ongoing adoption of agentic AI government market.

Latest Trends

Agentic AI is aiding the government in reducing the steps needed to address citizen needs, making interactions more straightforward and efficient. Additionally, these are being used for personalized assistance, tailoring responses and services to individual citizen’s requirements.

Governments are integrating agentic AI with the Internet of Things to create smart city initiatives, improving urban infrastructure and services. Moreover, with the rise of agentic AI, there is an increased emphasis on robust cybersecurity measures to protect sensitive government data and infrastructure from cyber threats.

Key Regions and Countries

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • Singapore
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

One of the leading player, LTIMindtree Ltd, a global technology consulting and digital solutions company, has made significant strides in the field of Agentic AI. One of their notable initiatives is the partnership and strategic investment in Voicing.AI, a next-generation startup focused on Agentic AI solutions for customer engagement processes.

Another prominent player, Mphasis Limited, a leading IT services company, has also been at the forefront of developing Agentic AI solutions for government and public sector clients. Mphasis focuses on leveraging AI to transform businesses and enhance customer experiences through intelligent automation and personalized solutions.

Top Key Players in the Market

• Microsoft Corporation
• Nvidia Corporation
• Salesforce, Inc.
• SAP SE
• Accenture plc
• DXC Technology Company
• SAS Institute Inc.
• Celonis SE
• LTIMindtree Ltd
• Mphasis Limited
• Persistent Systems
• Capgemini SE
• Others

Recent Developments

• In January 2025, ServiceNow launched its platform on Google Cloud Marketplace, with select offerings also available on Google Distributed Cloud, in response to increasing demand from both private and public sectors.
• In January 2025, Accenture has launched AI Refinery for Industry with a collection of 12 industry agent solutions to help organizations rapidly build and deploy a network of AI agents that can enhance its workforce, address industry-specific challenges and drive business value faster.
• In November 2024, Agency Launches Enterprise-Wide Approach to AI Adoption. A leading federal executive department of the U.S. government anticipated significant risks, challenges, and opportunities stemming from the use of artificial intelligence technology and developed an AI strategy and governance framework to help navigate the uncertainty.

Report Scope