Australia’s AI investment on track to hit $1.3b in the next year

Over the past 12 months—and especially in the last six—we’ve seen a marked uplift in AI enquiries and requests from both new and existing clients.

The breadth of these conversations spans everything from small-scale workflow automation to complex system integrations and strategic AI roadmaps.

Given the relative newness of AI in mainstream business adoption, we asked the question: how big is AI investment in Australia, and where is it headed?

Our research found that Australian businesses are poised to invest over $1.3 billion in artificial intelligence research and development within the next year.

Driven by a robust annual growth rate of 55%, business investment in AI is projected to have exceeded $1 billion in the most recent financial year, with forecasts suggesting this figure will climb to $1.3 billion by the end of June 2026.

These projections follow a record $668 million invested by businesses in AI R&D during FY24, a 142% increase since FY22 that outpaced every other area of technology research, including Data Science, Cybersecurity, and Cloud Computing.

This surge has propelled AI to become the third-largest area of technology R&D investment, trailing only Software Engineering and Information Systems.

Key findings:

• AI investment projected to exceed $1 billion by 2026
• AI R&D investment surged 142% from FY22 to FY24, reaching $668m
• AI now accounts for 7% of total tech R&D spend, overtaking Data Science
• AI is now Australia’s third-largest tech R&D sector

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The technology sector now drives 61% of all R&D growth in Australia, with IT research representing 42% of total national R&D spending.

This sustained investment trajectory represents a fundamental shift in Australia's approach to AI development.

At this growth rate, we're looking at nearly $4 billion invested in AI R&D over the next five years, and that signals that Australia is moving from AI observer to AI participant. This sustained investment level puts us in a position to develop homegrown AI solutions rather than simply importing technology from overseas.

This extraordinary growth in AI investment is generating new roles across AI development, engineering, and strategic implementation. Businesses that can navigate this transformation effectively will be essential for Australia's future competitiveness.

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How we arrived at our calculations

The data analysed by our team used the the Australian Bureau of Statistics (ABS) Research and Experimental Development dataset for the 2022 and 2024 Financial Years, using the compound annual growth rate over the two year period to predict future growth in the 2025 and 2026 financial years.

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