Federal Artificial Intelligence (AI) Market, 2026-2028

Artificial intelligence (AI) continues to gain momentum across the federal landscape, driven by new actions and priorities under the Trump 2.0 Administration. Policies such as the AI Action Plan and the Defense Industrial Base’s AI Roadmap are propelling AI into the spotlight, emphasizing its strategic importance and operational potential. Federal agencies are shifting from cautious experimentation to a more optimistic embrace of AI, aiming to build user trust and unlock value. Public-sector applications span military decision-making, logistics, procurement augmentation, and enhanced customer experience. Despite the excitement, agencies face hurdles with AI implementation, including tightening budgets, limited expertise, and the risk of implementation failure. Navigating this evolving terrain requires both innovation and pragmatism.

The executive branch is taking concrete steps to advance AI adoption across government. A key focus is strengthening data center infrastructure to meet the high computing demands of AI technologies. Likewise, an effort to fast-track FedRAMP authorization for AI solution providers is streamlining the path to compliance. Mechanisms to restructure federal acquisition are enabling public-private AI purchase agreements and prioritizing acquisition vehicles such as GSA’s Multiple Award Schedule, Other Transaction Agreements (OTAs) and Commercial Solutions Openings (CSOs).

Deltek forecasts that federal spending on AI and AI-related technologies will increase from $2.7B in FY 2026, to $3.1B in FY 2028, an increase of 15% in the next three years.

Key Findings

• Trump 2.0 AI Priorities. The White House is leveraging private sector expertise to advance its goal of U.S. AI global dominance. Key AI priorities under the Trump Administration include removing obstacles to innovation, expanding automation across government operations, promoting American-made AI, and boosting U.S. AI exports.
• Federal Enablement. Recent AI policy actions are aimed at overcoming key barriers to scaling AI within federal agencies, including insufficient support infrastructure, limited technical expertise, and concerns surrounding test and evaluation of AI systems.
• New Policies. AI-related policies issued since January 2025—including OMB memoranda on AI usage and procurement, the AI Action Plan, and the DIB AI Roadmap—are instrumental in shaping the future trajectory of the AI market.
• Acquisition Methodologies. The growing emphasis on Other Transaction Authorities (OTAs) and the addition of multiple AI solutions to the GSA Multiple Award Schedule (MAS) reflect a deliberate effort to streamline and accelerate agency access to AI technologies.
• Growth in Opportunities. The growing number of AI-related opportunities reflects a shift in agency priorities, from cautious skepticism to a more proactive focus on scaling and implementing AI technologies.
• Federal Applications. Defense AI use cases continue to build on ongoing efforts to mature AI for battle-space decision support and logistics, while civilian agency use centers on productivity, improving customer experience and fraud prevention.
• Generative and Agentic AI. Recent workforce reductions and the push for more efficient government operations will drive agencies to increasingly explore AI capabilities such as generative and agentic AI to augment these changes.
• AI Maturity Gap. AI spending remains concentrated among select departments and top vendors across prime contracts, OTAs, and SBIR/STTR awards.

Critical Insight for Vendors

Deltek's Federal Artificial Intelligence (AI) Market, 2026-2028 report provides insight into the policies, trends and drivers sharing federal AI acquisitions.

The report provides:

• Analysis of the policies and legislation impacting federal AI adoption and acquisition.
• Key drivers enabling federal AI expansion.
• Assessment of historical spending patterns and contracting trends.
• Contractor-addressable market forecasts across the federal sector and top agencies for the next three years.
• Understanding of the major AI programs and initiatives at agencies.  
• Recommendations to help guide contractors to evaluate and refine business development strategies.  

Deltek's Federal Artificial Intelligence (AI) Market, 2026-2028 report is delivered in PowerPoint® format, including a PowerPoint® Executive Briefing, and an Excel® data workbook.