Artificial intelligence (AI) is poised to revolutionize Federal operations, but agencies are struggling to move beyond pilot programs. A new MeriTalk study, “Tech Tonic: 2025 Federal CAIO Outlook,” reveals that while AI use cases have doubled over the past year, government leaders face systemic hurdles in scaling AI for real mission impact.
The report – based on insights from 10 Federal Chief AI Officers (CAIOs) – underscores a stark reality: AI adoption in government is at an inflection point. Eighty-five percent of CAIOs believe AI will transform their agencies by 2030, yet all surveyed leaders cite insufficient funding or resources as a major barrier. Bureaucratic red tape, leadership constraints, and outdated infrastructure are further slowing the transition from experimentation to full-scale deployment.
“AI is no longer optional – it’s the foundation for the future of government,” said Steve O’Keeffe, founder of MeriTalk. “The question isn’t whether agencies should scale AI, but how fast they can do it before they fall behind. Federal leaders must move beyond pilots and take bold, systemic action – empowering CAIOs with real authority, securing sustained funding, and modernizing infrastructure – to drive AI transformation at scale.”
The Leadership Gap
The CAIO leadership structure remains a critical obstacle to AI progress. Eighty-eight percent of surveyed CAIOs juggle multiple roles, despite universal agreement that the position demands full-time dedication. Nearly half (42 percent) say they lack the authority to drive meaningful AI change within their agencies. Without a clear mandate to lead, AI efforts remain fragmented and slow to scale.
Breaking Through Bureaucratic Barriers
Beyond leadership constraints, agencies face:
- A lack of internal AI expertise (83%)
- Data quality and accessibility issues (67%)
- Difficulty integrating with legacy systems (50%)
These roadblocks prevent agencies from leveraging AI’s full potential, keeping many initiatives focused on early-stage governance and risk management efforts rather than driving mission-critical efficiencies.
Still, the report notes some bright spots. One Federal AI program saw on-network generative AI usage expand from 1,000 to 4,000 users – with 72% agreeing the tool made them more efficient.
Moving from Pilots to Full-Scale Deployment
The report lays out key recommendations for overcoming AI stagnation:
- Democratize AI literacy: AI won’t deliver results without skilled personnel to implement and scale solutions
- Own the narrative: Clear, strategic communication around AI goals and expectations is non-negotiable
- Empower AI leadership: Ensure CAIOs have clear authority, dedicated resources, and a direct line to agency leadership
- Fix the foundation: No modernization, no AI – invest in compute, cloud, data, and flexible procurement models
- Scale aggressively: Commit to scaling the pilots that work, fostering cross-agency communication, and embedding AI into core mission functions
The Path Forward
With the new administration prioritizing AI innovation, Federal agencies must act decisively to drive meaningful transformation. Sixty-seven percent of CAIOs believe the Trump administration will fast-track Federal AI adoption.
Federal leaders should approach AI as a strategic imperative rather than simply another emerging technology. To accelerate progress, agencies need strong leadership, dedicated resources, and a clear roadmap for scaling applications across operations.
Download the full “Tech Tonic: 2025 Federal CAIO Outlook” report for key insights and implementation strategies: https://www.meritalk.com/study/tech-tonic-2025-federal-caio-outlook/.