Sydney, 16 July 2026 | After years of having an acknowledged AI trust deficit, Australian businesses are embracing AI faster than ever, with investment, adoption and expectations on ROI all increasing according to new �鶹ԭ�� research. But that new-found confidence may also be creating new blind spots.

AI now supports over a quarter (29%) of tasks in the average Australian business, up from 25% last year¹, with leaders expecting that to reach 48% within two years, up from 41% in 2025. While Australia still trails high-adoption markets including the US, Germany, China, Japan and India, its higher-than-average pace of growth could potentially help close the gap.

�ճ�����鶹ԭ�� Value of AI Report 2026, conducted by Oxford Economics across more than 2,600 business leaders in 13 countries, identifies a clear gap between Australia’s AI ambition and its readiness to deliver on it, particularly around data foundations, governance frameworks and leadership oversight.

“Think of this as Australia’s AI school report: improving, but still not working to its potential,” said Angela Colantuono, President and Managing Director, �鶹ԭ�� Australia and New Zealand. “With an estimated AU$150 billion of AI-related infrastructure investment promised over the next several years, Australia has a once-in-a-generation opportunity to turn AI confidence into national competitive advantage. But infrastructure alone won’t get us there. And with multiple new AI obligations coming into play for Australia between now and the end of the year, driven by local and international regulation, organisations need to strengthen their data foundations, governance frameworks and leadership structures. Otherwise, we risk building the rails for an AI economy without being ready to run on them.”

Investment and ROI is accelerating

As an average, Australian organisations expect to spend approximately AU$35.5 million² on AI this year, up from AU$27.5 million last year, with a further 44% increase expected over the next two years. That said, Australian spend still trails the global average of AU$40.4 million by around AU$5 million, a gap that reflects both the opportunity and the urgency to move faster.

Returns are growing alongside that investment. Australian companies expect to drive ROI of 19% this year, up from 15% last year, and rising to 37% in two years – though still below the global average.

“The returns are starting to come but not fast enough, and not for everyone. AI value compounds over time. The organisations that act now, focus on the right end-to-end processes and get their data in order will look back in two years and be glad they did. The ones that wait will be asking why the gap got so hard to close,” continued Colantuono.

Agentic AI is central to those ROI expectations. ROI from agentic AI is expected to reach AU$21.2m in the next two years, more than quadrupling from last year’s estimates of AU$4.4m. Despite this, 62% of Australian businesses say they are satisfied with their current AI ROI, even though over half acknowledge AI is still not achieving its full potential.

Governance needs work

The governance picture is more concerning. Only one in five (22%) say they are mostly or fully ready in AI governance when it comes to skills and expertise, against 33% globally. Some 42% suggest they are deploying agents faster than they can standardise and govern them, rising to 68% when including those who are unsure. Over half (54%) of business leaders say employees are increasingly accepting AI outputs without sufficient scrutiny.

The operational risks are real: 43% do not have human-in-the-loop processes for agentic workflows, while nearly half (49%) report that AI agents have already taken incorrect actions during pilots or deployment, typically causing some rework and delays.

Leadership structures also trail global peers. Under half of Australian companies have a dedicated AI leader responsible for AI adoption (46%), leadership KPIs for AI (33%), or even training on AI capabilities and risks (41%).

Professor Toby Walsh, Scientia Professor of Artificial Intelligence at UNSW’s School of Computer Science and Engineering, said “Lack of understanding risks driving decisions by fear rather than evidence, and so closing the governance gap must start with closing the trust gap. Artificial intelligence is only valuable if people know when to trust it, and when to question it. Good governance shouldn’t be viewed as slowing innovation. It’s what allows organisations, employees and the broader community to adopt AI with confidence.”

Data recognised as essential, but readiness lags

While Australian leaders rank integrated data systems (64%) and data quality (51%) as the biggest enablers of AI readiness, data quality remains the biggest challenge for AI in Australia, with the share of businesses that say they are data-ready for AI falling from last year; nearly three-quarters (73%) report challenges with poor data quality.

Sovereign AI requirements are also shaping how organisations scale – 99% of Australian organisations say they now operate under some form of sovereign AI framework or requirement, and 76% cite data residency constraints that limit model choice.

Workforce readiness will determine whether momentum translates into value

More than four in five (82%) Australian businesses are not convinced their upskilling is keeping pace with AI’s rapid evolution, while 77% report shadow AI occurs at least occasionally. Only 1% of leaders believe AI will have no impact on workforce planning.

“These findings point to an urgent need for role-specific training, stronger safe-use guidance and change management that brings employees along as AI becomes embedded in daily work,” said Colantuono.

Confident adoption, early stage maturity

Australia’s maturity is progressing, particularly in generative AI, where 53% of organisations are scaling or leading – close to the global average of 54%, but still 17 percentage points behind the US, China and Germany. The gap is wider on agentic AI, where only 19% are scaling or leading versus a global average of 24%.

On more established technologies, Australia sits close to the global average in software automation and RPA but trails in traditional machine learning at 52% who are scaling or leading versus 59% globally.

In addition, the dominant adoption pattern remains project-by-project – targeted deployments within individual processes rather than coordinated, enterprise-wide transformation. Additionally, Australian organisations are less likely than global peers to connect AI strategy to industry-specific priorities.

“Australia has moved from AI hesitation to AI momentum,” Colantuono concluded. “Now we need to turn that momentum into maturity: stronger governance, better data and a workforce ready to use AI with confidence. Get that right, and Australia won’t just catch up, it can lead the world in responsible, high-impact AI,” concluded Colantuono.

More information on the research will be shared at the �鶹ԭ�� NOW AI Tour taking place at the Hordern Pavilion in Sydney on 12 August.�� For more information or to register, click .

For the full report click here: �鶹ԭ�� Value of AI 2026 Australia

¹ For the �鶹ԭ�� Value of AI 2025 research findings, click here.

² Respondents were asked to provide��financial��estimates in USD. AUD figures are based on an��exchange��rate��of AUD $1 = USD$0.69, using the exchange rate��as of 13 July 2026.

The post Australia’s AI report card: “Improving… but could do better” appeared first on �鶹ԭ�� Australia & New Zealand News Center.

��At its flagship event , (NYSE: �鶹ԭ��), today highlighted the five most widely adopted AI use cases among its Australian customers. Based on analysis of all �鶹ԭ�� customers in Australia and New Zealand (ANZ) between May 2024 to May 2025, the most popular AI use cases in ANZ, these include:��

• Automated expense generation using receipt images��

• Automated invoice processing����

• Expense verification and compliance checks��

• Real-time alerts for supply chain disruptions��

• Sales demand forecasting powered by predictive analytics��

“My conversations with CEOs are increasingly revealing how they are looking to embed AI into some of the most fundamental parts of their business,” said Angela Colantuono, Managing Director, �鶹ԭ�� Australia. “These applications are helping Australian organisations make faster, smarter decisions, reduce risk and unlock new value. But to fully realise AI’s potential, we need to invest just as much in people as we do in technology.”��

Dr Catriona Wallace, AI Ethics Expert and Founder, Responsible Metaverse Alliance, who keynoted at the event shared, “AI is the number one existential risk we face today. Yet only a small fraction of Australian organisations are equipped to use it responsibly. If we want AI to drive innovation, productivity and public trust, we must move beyond ambition to action. That means embedding responsible AI frameworks that are transparent, ethical and human-centred, and doing it now, before the gap between use and governance becomes too wide to close.”

Customers and partners across Australia and New Zealand show AI momentum��

From education to manufacturing, �鶹ԭ�� partners and customers are also showcasing strong momentum in AI and cloud transformation.��

La Trobe University has become the first university in the ANZ region to go live with �鶹ԭ�� S/4HANA Cloud Public Edition leveraging the GROW with �鶹ԭ�� transformation journey.�� From the move, La Trobe has been able to modernise its core operations across Finance, Procurement, Logistics, Sales, R&D Engineering and Real Estate and lay the groundwork for future innovation, including AI-driven insights and automation.��

“This transformation is a major step forward in how we operate,” said Shainal Kavar, Chief Information Officer, La Trobe University. “It’s helping us simplify complexity, streamline processes, improve reporting and decision-making and free up our people to focus on higher-value work. Most importantly, it sets us up to embrace innovation and unlock the potential of AI in the years ahead.”��

Lion, one of Australia and New Zealand’s leading brewers, is accelerating its cloud-first transformation with RISE with �鶹ԭ�� on AWS. By adopting a clean core, the �鶹ԭ�� principle of keeping core ERP system free from customisations, as well as �鶹ԭ��’s Business Technology Platform, Lion has improved order-to-cash cycles, scaled digital channels, and empowered teams with real-time insights. The company also partnered with �鶹ԭ�� to build ‘Joey’, an AI-powered beer recommendation app, in under 10 days, demonstrating the speed and value of �鶹ԭ��’s generative AI tools.��

“AI is helping us move faster, make smarter decisions, and deliver better customer experiences,” said Ram Kalyanasundaram, Group Technology and Digital Transformation Director at Lion. “It’s not just about automation, it’s about enabling our teams to focus on what matters and giving them the tools to innovate. �鶹ԭ��’s AI capabilities have been a game-changer in how we think, operate and grow.”��

�鶹ԭ�� Intrepid Women AI Tour 2026��

�鶹ԭ�� is also proud to announce the return of the �鶹ԭ�� AI Intrepid Women Tour in January 2026. This four-day executive study program is designed to empower female leaders with the skills, confidence, and strategic insight to lead in the age of AI.��

Following the success of the 2025 tour, the 2026 program will bring together Australia’s most influential female technology executives to explore AI innovation across �鶹ԭ��’s global innovation hubs.��

“Less than 15% of senior AI executives are women today,” said Colantuono. “Last year’s program proved that when you bring female leaders together to build AI literacy and share experiences, the impact is extraordinary – not just for their businesses, but for the future of innovation in Australia.”��

Visit the . Follow �鶹ԭ�� at . �į ��

 Media Contact:��

Rebecca English (+61) 438 520 181, rebec@sap.com, AEST
�鶹ԭ�� �鶹ԭ�� Room; press@sap.com��

About �鶹ԭ�� 

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