Australian organisations are accelerating investment in artificial intelligence and expecting significantly higher returns, but many remain unprepared to manage the technology responsibly, according to new research..
SAP’s Value of AI Report 2026, conducted by Oxford Economics across more than 2,600 business leaders in 13 countries, found AI now supports 29 per cent of tasks in the average Australian business, up from 25 per cent last year.
That figure is expected to rise to 48 per cent within two years, according to those polled.
Australian organisations also expect to spend an average of $35.5 million on AI this year, up from $27.5 million in 2025, while anticipated return on investment is forecast to increase from 19 per cent this year to 37 per cent within two years.
Despite this, however, the report warns that Australia’s governance and data capabilities are lagging behind its AI ambitions.
“Think of this as Australia’s AI school report: improving, but still not working to its potential,” Angela Colantuono, president and managing director of SAP Australia and New Zealand, said in a statement.
“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.”
The research found only 22 per cent of Australian organisations consider themselves mostly or fully prepared from an AI governance perspective, compared with 33 per cent globally. More than half of business leaders said employees were increasingly accepting AI-generated outputs without sufficient scrutiny, while 43 per cent reported having no human oversight processes for agentic AI workflows.
Data quality also remains a significant challenge, with 73 per cent of organisations reporting issues that limit AI readiness despite identifying integrated, high-quality data as a critical enabler of successful AI deployments.
UNSW Scientia Professor Toby Walsh said stronger governance should be viewed as an enabler rather than a barrier to AI adoption.
“Artificial intelligence is only valuable if people know when to trust it, and when to question it,” Walsh said.
“Good governance shouldn’t be viewed as slowing innovation. It’s what allows organisations, employees and the broader community to adopt AI with confidence.”
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David Hollingworth
David Hollingworth has been writing about technology for over 20 years, and has worked for a range of print and online titles in his career. He is enjoying getting to grips with cyber security, especially when it lets him talk about Lego.