Report highlights AI oversight gaps and the need for a governance framework for artificial intelligence within the Department of Energy.

The U.S. Department of Energy’s Office of Inspector General (OIG) released its Management Challenges at the Department of Energy — Fiscal Year 2026 report, identifying artificial intelligence (AI) as one of the agency’s significant management challenges. The special report, required by statute, provides senior DOE officials and policymakers with a high-level view of key risks and areas needing attention.

The OIG noted that the rapid advancement and adoption of AI technologies pose significant challenges for the Department. It stated the DOE should establish a “comprehensive governance framework” to guide development and deployment of AI to address risks and ensure the agency appropriately leverages work done by National Laboratories and other Department components.

The report said the development of common standards, the promotion of best practices, and the mitigation of potential risks could help ensure consistent and effective AI implementation. It also noted that the Department is developing an AI Strategy and Compliance Plan to address ethical concerns, security, governance, and risk management for AI technologies.

According to the OIG, the Department is deploying AI to model energy systems, automate permitting processes, including PermitAI, enhance electrical grid stability, and secure critical infrastructure through platforms such as Lantern at the Oak Ridge National Laboratory. The report also said DOE is exploring siting AI data centers on agency lands to co-locate with high-performance computing assets.

The management challenges report applies across the Department’s diverse missions, including national security, scientific research, energy production, and environmental cleanup, and reflects the OIG’s oversight work over the previous year. The report was transmitted to the Secretary of Energy on December 17, 2025.