Despite the increasing prevalence of algorithm-mediated public services, there continues to be a limited understanding of citizens’ perspectives on this matter, particularly in the Global South. This study explores citizens’ experiences as users and affected stakeholders of algorithm-supported decision-making. From a qualitative perspective, we conducted and analyzed face-to-face interviews (N = 27) in Santiago, Chile. From the standpoint of folk theories as behavior guides, we identified that people tend to associate AI and algorithms with expanding the State’s monitoring, organizing, and decision-making capacity. At the same time, they express a prevailing sense of trust, but with certain boundaries. This trust is influenced by factors, such as a belief in AI’s future promise, a need for human mediation, and limitations related to structural inequalities. These findings underscore the responsibility placed on technology developers and public policymakers, emphasizing the importance of adopting an intersectional and position-based approach to AI design.