This chapter examines the adoption of Artificial Intelligence (AI) in government, exploring its transformative roles, benefits, challenges, solutions, and implications for both theory and practice. The research also provides case studies of how AI enhances governance through improved decision-making, public service delivery, citizen engagement, public safety, and regulatory compliance. To explore AI benefits and challenges, we draw on global case studies from countries such as the USA, Singapore, Sweden, Estonia, the UAE, and Japan, as well as US states including California, Texas, Ohio, and cities like Boston, Chicago, and New York City. The study illustrates that common theories applied to understand AI adoption in government include the Technology Acceptance Model (TAM), socio-technical systems theory, and adaptive governance paradigms. This study identified common challenges associated with AI adoption, including technical, ethical, societal, and regulatory issues, which were addressed through strategies such as phased implementation, stakeholder collaboration, human oversight, and adaptive policies. The lessons from the case studies highlight the importance of inclusivity, transparency, and continuous refinement in AI applications. The analysis highlights that AI adoption in government requires balancing innovation with ethical governance, prioritizing citizen-centric approaches, and fostering cross-sector collaborations. This study concludes that while AI presents transformative potential for public administration, its success hinges on adaptive governance frameworks, capacity building, and equitable access, offering valuable insights for policymakers, practitioners, and scholars in the digital governance landscape.