UPDATE: Major Australian companies are increasingly hesitant to embrace artificial intelligence (AI) technology due to urgent concerns over regulation and a shortage of skilled labor. A new report from Amazon Web Services, released on September 15, 2023, reveals that despite these challenges, the adoption of AI is surging across Australia, particularly among start-ups.
The study surveyed over 2,000 executives and found that AI usage has grown by 16 percent from 2024 to 2025, adding an impressive 180,000 businesses to the AI landscape. While more than half of Australian companies are now utilizing AI, a staggering 58 percent are only implementing it at a basic level, achieving modest efficiencies.
The report highlights a stark contrast in AI adoption between large enterprises and smaller, more agile companies. According to Michelle Hardie, head of professional services at Amazon Web Services, only 18 percent of large businesses are using AI to develop new services. In contrast, nearly 42 percent of start-ups are leveraging AI to innovate and bring new products to market.
“Start-ups in Australia are really pioneering transformative innovation,” Hardie stated in an interview. “The gap between large and small businesses could result in a two-tier economy, impacting Australia’s growth and innovation in the AI sector.”
Three primary barriers hinder broader AI adoption, the report indicates. Respondents identified a lack of digital skills (39 percent) and difficulties in attracting skilled local workers (38 percent) as the main obstacles. Furthermore, less than one in four people (24 percent) are aware of the government’s AI consultation, highlighting a significant disconnect between policymakers and businesses.
Many companies are calling for clearer and more ethical AI regulations. “Ensuring that AI regulation is predictable and innovation-friendly is crucial for enabling AI adoption across all sectors,” Hardie emphasized. The Australian federal government issued voluntary AI guidelines in September but has yet to respond to public consultations regarding mandatory regulations.
With AI declared a national priority, the government faces pressure to find a balance between promoting innovation and mitigating potential risks. As OpenAI plans to establish a base in Australia amidst this growing demand, the urgency for decisive regulatory action has never been more critical.
The Australian business landscape is at a pivotal moment. As the adoption of AI continues to rise, the call for clear regulations and a skilled workforce will be essential in shaping the future of innovation in the country. Companies are urged to stay tuned for forthcoming government announcements that could redefine the AI landscape in Australia.
