In recent years, governments and policymakers worldwide have been working to understand and respond to the rapid evolution of artificial intelligence. As 2026 begins, several realities are emerging – shaping local and global approaches to AI governance.
Governments will fast-track AI adoption to revolutionise public services. After a year of cautious exploration, 2026 will mark a turning point. States and countries across the globe are moving from curiosity to commitment as professionals work to adopt AI and integrate it into operations by revamping procurement rules, modernising legacy systems and investing in workforce upskilling.
The Australian Government is also starting to mandate clearer transparency and accountability requirements around AI use and that will expand with the opening of the Australian Artificial Intelligence Safety Institute (AISI) this year. Expect a surge in public-private partnerships as governments race to embed AI into their operations and deliver smarter, more responsive services.
AI’s regulatory integration within existing frameworks will advance– but global harmony remains elusive.
In 2026, policymakers will focus on pragmatism, leaning on existing laws to guide AI oversight. As with the Australia National AI Plan, we will see more instances of enforcement agencies leveraging pre-existing regulatory frameworks to address consumer protection and privacy concerns relating to AI in areas like finance, healthcare and energy. But as the speed of AI advancement and applications continues to outpace regulatory development, renewed calls for stricter regulation will inevitably clash with the reality of a rapidly evolving technological landscape.
One risk that needs to be considered is conflicting efforts at state and federal levels to regulate AI, which will lead to inharmonious standards across jurisdictions, making compliance more challenging and once again threatening to inhibit innovation. These tensions will require government entities at all levels to partner with the private sector to help shape the evolving regulatory framework and standards.
Countries around the world will make AI sovereignty a national imperative.
Countries will double down on homegrown AI strategies—keeping data local, nurturing domestic innovation and reducing reliance on foreign tech. Yet, this push may widen the gap between tech-rich nations and those still building capacity. Whether truly independent or negotiated, this year we will see many nations, including Australia, seeking some form of AI sovereignty.
In Australia, the focus is currently on data sovereignty, with sovereign AI in model-building expected to follow as the next step. In addition, we can expect 2026 to bring new alliances as emerging economies seek secure partnerships to build infrastructure and host data, reshaping geopolitical dynamics in the process.
Public-private alliances will redefine the global AI race.
Governments and industry are now working more collaboratively on AI policy. After years of navigating differing perspectives – governments are seeking assurance on commitments to ‘responsible AI’ and industry voicing concerns about risks of over-regulating emerging technology – 2025 marked a shift towards great alignment.
Here in Australia that included the National AI Plan which gave organisations a clearer ballpark in which to play. 2026 will bring deeper collaboration in a way not seen for decades (if ever before).
With governments offering regulatory support and industry delivering innovation, the two will work in lockstep to deploy AI infrastructure and export national capabilities. The goal: global tech leadership through strategic alignment of public and private interests.
Without policy intervention, energy bottlenecks will hinder AI’s growth trajectory.
Data centres are hungry for power, but grids are strained. In 2025, governments acknowledged physical constraints of compute power limited the full potential of AI. In 2026, governments will tackle infrastructure chokepoints—transformers, transmission, substations and cooling systems—while incentivising energy-efficient AI models and edge computing.
New and unexpected partnerships will emerge across geographies and industries as the conversation evolves from energy scarcity to energy-smart innovation. Nations with abundant, accessible energy, which Australia has the potential to be with renewables, will gain a strategic edge in the AI race.
Workforce policy will pivot from future-proofing to present-tense urgency.
Governments will shift their focus from long-term STEM education to immediate upskilling of today’s workforce. With displacement fears rising, expect policies that push companies to retrain employees and share knowledge across sectors.
Several Australian states are already exploring rapid AI capability uplift for frontline public servants, and this is expected to scale nationally. However, this can’t rest solely on government shoulders, and the private sector has a role to play here too. Not just data science, but governance, applied AI proficiency and responsible-use training. 2026 will be the year of the AI-ready workforce—by necessity, not choice.
AI will reshape healthcare – and reignite policy debates.
From diagnostics to personalised care, governments will deploy AI to expand access and improve outcomes. But as real-world applications accelerate, so will scrutiny. 2026 will see renewed debates on data privacy, ethical use and safety as policymakers move from theoretical discussions to practical governance of AI in medicine.
In Australia, this debate will intersect with ongoing reforms to My Health Record and consideration of digital identity systems, as well AI-enabled diagnostics and workflow tools.
AI will become a cornerstone of national security.
Defence, cybersecurity and disaster response will increasingly depend on AI to anticipate threats, accelerate decision-making and safeguard critical infrastructure. Governments will develop governance frameworks to help ensure AI is deployed securely, ethically and in alignment with mission-critical objectives.
Australia is seeing a steady but relatively quiet, organic uptake of AI across these sectors. It’s happening largely within agencies, supported by existing modernisation programs. Nevertheless, this convergence will shape AI security priorities, reinforcing the need for strategies that strengthen a future-ready defence posture.
Agentic AI will challenge policy norms. As autonomous AI agents take on complex and more sensitive tasks across sectors, policymakers will face urgent questions around accountability, transparency and human oversight – requiring consideration of forward-looking interworking frameworks that guide their safe integration.
We will see these discussions burgeon in 2026, though resolution will be a long way off even as technology swiftly continues to develop and the path to adoption becomes clearer. This is particularly true in Australia, where adoption of these technologies may progress at a more measured pace then the U.S., reflecting our thoughtful regulatory culture and careful approach in the public sector.
The Bottom Line
With AI’s trajectory accelerating, one thing is clearly coming through in 2026: policymakers and the public sector are stepping deeper into the AI race. Public-private partnerships will become a force multiplier – speeding innovation, scaling secure solutions and embedding resilience into national digital and physical infrastructure.
Angela Fox is Senior Vice-President, Dell Technologies Australia and New Zealand and Nicole Jefferson is Vice-President, International Government Affairs, Dell Technologies.
This article was produced by InnovationAus.com in partnership with Dell Technologies.
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