The increasing use of artificial intelligence (AI) by public authorities introduces both opportunities for innovation and significant challenges for the administrative rule of law. This article examines how the EU AI Act interacts with the fundamental principles of administrative law, with a particular focus on administrative discretion, the duty to state reasons, and proportionality. It analyses the regulatory obligations imposed by the AI Act on public sector deployers of high-risk systems, especially in sensitive domains such as social benefits, migration, education, and law enforcement. It also explores whether the AI Act adequately ensures accountability, transparency, and reviewability in automated public decision-making. The article further considers how the AI Act's risk-based approach aligns (or fails to align) with the principle of proportionality and it proposes safeguards and interpretative strategies to ensure the ethical and lawful deployment of AI in the public sector.