During this year’s Smart Cities Connect Conference and Expo in Raleigh, NC, one topic garnered considerable attention: AI. Within many city governments, AI is past experimentation and has moved into production. In 2026, city IT leaders are prioritizing  safe, secure, and data-driven AI deployments that deliver measurable outcomes in mobility, public safety, infrastructure management, and climate resilience.

However, as cities move toward operational AI, challenges exist around data readiness, governance, and integration across departments.

This year’s Beyond the Beltway conference highlighted key strategic findings from IT leaders that signal where 2026 technology investments will be made and where to focus efforts for success. In 2026, state and local governments are at an inflection point: with rising expectations evolving alongside tightening budgets, staffing and timelines, success will depend on alignment of solutions to modernization requirements, workforce challenges and measurable ROI-driven outcomes.

The 2026 FETC Conference took place in Orlando, Florida this year, where K-12 education leaders highlighted how budgets, technology trends, requirements and opportunities are intersecting and how alignment is key to success.

This week, the National Association of State Chief Information Officers (NASCIO) released it annual State CIO Top Ten Policy and Technology Priorities list for 2026, signaling where state technology leaders are focusing their efforts, and limited resources, in the new year. This year’s list is reflective of the current policy, priority, and funding shifts that have affected SLED agencies most, coupled with the apparent drive towards innovation and modernization.

On December 11, 2025, President Trump signed a new executive order that could reshape how AI is governed in the U.S. This executive order titled “Ensuring a National Policy Framework for Artificial Intelligence,” aims to limit the ability of individual states to enact their own AI regulations, thereby establishing a unified and “minimally burdensome” approach to AI policy nationwide (up until this point, there has been a patchwork of state-level AI regulations).

The One Big Beautiful Bill Act (OBBA), enacted on July 4, 2025, is a significant piece of legislation outlining President Trump's executive agenda and guiding future U.S. tax and spending policies.

On July 23, 2025, the Trump administration released an AI Action Plan, highlighting 90 federal policy directives across three key pillars: Accelerating Innovation, Building American AI Infrastructure and Leading in International Diplomacy and Security. The Plan also supports the tenants of the President’s earlier January 23, 2025, Executive Order 14179, “Removing Barriers to American Leadership in Artificial Intelligence.”