Government agencies are facing increasing challenges in combating sophisticated cyberattacks while managing outdated legacy systems, which consume a significant portion of their IT budgets. However, the integration of artificial intelligence (AI) and observability is proving crucial in enhancing these agencies' capabilities to address modern security threats. Traditional, rules-based security solutions are inadequate for the dynamic, complex environments of today's cloud-native and microservices-based applications. AI and observability enable agencies to gain real-time insights into their systems, proactively identifying vulnerabilities and automating responses to threats, thereby eliminating unknowns. The combination of AI and observability allows for the continuous monitoring and protection of applications, ensuring maximum performance and security, as demonstrated during the Log4Shell vulnerability crisis in December 2021. By adopting these advanced technologies, government agencies can modernize their systems, safeguard citizens' data, and reinforce public trust, which is vital in an era of declining confidence in government institutions.