# State and Local Governments Assess Agentic AI Readiness

A recent report by Market Connections, sponsored by OutSystems, reveals that 70% of state and local government leaders in the United States consider their agencies at least somewhat prepared to adopt agentic AI technologies at scale. The report outlines key factors driving adoption as well as the security and privacy challenges that must be addressed to implement these advanced AI solutions effectively. This assessment provides procurement professionals and contractors with critical insights into the evolving demand for AI capabilities within state and local government sectors.

- **Why this matters:** Agencies are increasingly prioritizing agentic AI adoption, signaling growing procurement opportunities for AI technology providers and integrators.
- Security and privacy concerns remain significant barriers, indicating a need for vendors offering robust, compliant AI solutions.
- Procurement teams should evaluate current AI readiness levels and incorporate agentic AI capabilities into future solicitations and contract planning.
- Vendors can leverage this readiness trend to tailor offerings that address government-specific operational and regulatory requirements for AI deployments.

**Jurisdictions:** sled
**Industries:** Information Technology
**Topics:** Artificial Intelligence
**Published:** September 21, 2026

### Government Entities
- State and Local Government

### Vendors
- Market Connections (research sponsor)
- OutSystems (sponsor)

### Sources
- [State & Local Government Agentic AI Readiness Report](https://www.defenseone.com/assets/state-local-government-agentic-ai-readiness-report/portal) - Defense One