As a result of the prominence of generative artificial intelligence across diverse fields, it has become necessary for governments to develop national strategies for directing the ethical use of artificial intelligence to respect fundamental human values. This paper explores the role of Generative Artificial Intelligence (GAI) in technology sovereignty, its contributions, and benefits for the government, associated risks, and challenges, and how it influences government policies. It begins with examining GAI's capabilities to comprehend how it understands natural language, trains on existing data, and generates realistic outputs, followed by a discussion of its potential benefits for governments that enable them to act independently and autonomously in diverse sectors. It highlights how it can empower them to administer technological ecosystems, promote domestic innovation, and facilitate policy-making processes. However, contrary to its benefits, GAI is also capable of inflicting negative consequences on society. Therefore, the paper also addresses the risks and challenges associated with GAI that necessitate reflection on existing policies and developing new ones that align with a nation's legal frameworks. Exploring the influence of GAI on government policies, the paper highlights the significance of collaboration in policy-making endeavors to ensure ethical future developments and bring value to public interest and democratic values. This comprehensive analysis aims to shed light on the responsible and ethical use of GAI to preserve human rights, promote economic growth, sustain social justice, and inform the responsible use of GAI within the framework of technology sovereignty.