Australian Firms Trail Global AI Spending by Half as China Leads Investment Race

Australian businesses are falling behind global competitors in artificial intelligence investment, spending an average of $26.7 million compared to China's $58.7 million and a global average of $51.7 million, according to data disclosed in a new industry report.

The spending gap comes even as Australian companies demonstrate concrete returns from AI deployment. Freedom Furniture, which expanded its online catalogue from 12,000 products four years ago to more than 70,000 today, recorded conversion rates and transactions up to 50 percent higher among customers engaging with AI-powered search in certain months following implementation. The retailer has embedded AI across search and customer engagement to manage tens of thousands of SKUs ranging from $30 homewares to $8,000 sofas at a scale that would be impossible manually.

"This isn't just about technology, it's about competitive survival," says Angela Colantuono, President and Managing Director of SAP Australia and New Zealand. "In addition to boosting revenue, AI is about building smarter operations and empowering people to focus on the work that matters."

The investment disparity extends beyond Australia. Software firm SAP on Tuesday introduced the Autonomous Enterprise, a unified platform for building and governing AI agents alongside an autonomous suite designed to execute core business operations. The company launched a 100 million Euro fund for partners to help customers deploy SAP-built AI assistants and agents across finance, supply chain, procurement, human capital management and customer experience.

"By uniting SAP Business AI Platform with SAP Autonomous Suite, we anchor AI agents in the business processes, data and governance so they can deliver accurate, compliant and secure outcomes, unlocking new sources of revenue and meaningful cost savings," said Christian Klein, CEO of SAP SE.

Short-term rental management platform Hospitable has increased AI spending by 50 percent since December, a sum equivalent to three full-time employees. AI agents now generate 90 percent of the company's code, answer 70 percent of customer support queries, and manage marketing campaigns. The 140-person company has reduced hiring but made no redundancies. Had it not implemented AI tools, the company would have needed to triple its 65-person support team, according to CEO Pierre-Camille Hamana.

Insurance provider Uniqa Insurance Hungary has deployed an AI system called NiQA that can analyse photos, interpret documents, calculate losses and determine payouts. Since last month, NiQA has been operating autonomously, authorising and executing payments up to a predefined threshold without human intervention, says chief executive Krisztián Kurtisz.

(The spending figures come from an industry report cited by SAP Australia and New Zealand. Freedom Furniture's results reflect performance in specific months following AI implementation, not sustained averages across all periods.)

The consulting industry is responding to the shift by hiring more technical talent and building AI tools. McKinsey, BCG, Deloitte, EY, KPMG, PwC, and IBM Consulting are now promoting a new class of "forward-deployed engineers" who work directly with clients to customize AI tools, connect them to company data, and turn them into products that solve specific business problems. These employees function as part engineer, part strategist, and part translator between AI systems and the companies trying to use them.

According to a 2026 report from Intuit and the Initiative for a Competitive Inner City, 89 percent of small businesses are using AI tools to automate tasks and improve efficiency. Yet research published in partnership with PayPal revealed that while over 50 percent of small business respondents were exploring AI implementation, 73 percent noted they lacked the tools or training to implement AI. PayPal has launched a free online course titled AI Fluency for Small Businesses to address the gap.

The U.S. Census Bureau found that less than a fifth of firms are using AI in any business function, and a March 2026 study from Anthropic found that its AI models were being used for only a "fraction" of the work-related tasks they are already capable of. The technology is advancing faster than most companies can adopt it, creating a diffusion lag that may delay the full economic impact of AI deployment.