2024 was a defining year for AI in Aotearoa New Zealand and Australia. The hype cycle matured into pragmatism. Government policy took shape. Enterprise adoption diverged sharply between leaders and laggards. This report reviews the year across five dimensions (policy, adoption, talent, investment, and ecosystem) and maps the trajectory for 2025.
Executive Summary
The NZ/AU AI ecosystem in 2024 can be summarised in three statements:
- Government policy advanced but remains fragmented. Both NZ and Australia made progress on AI governance guidance, but neither has broad AI-specific legislation. The gap between guidance and regulation creates uncertainty for enterprise adoption.
- Enterprise adoption split into two tiers. A small group of organisations built AI foundations and are now compounding capability. The majority remain in experimentation mode with limited production deployment.
- The talent gap widened despite increased investment. AI talent demand grew faster than supply. The gap is most acute in applied and leadership roles, not pure technical positions.
89%
of NZ/AU enterprises report AI as strategically important - up from 71% in 2023
Source: NZTech, AI Readiness in Aotearoa 2024
23%
have deployed AI in production beyond a single use case - up from 15% in 2023
Source: Compiled from NZTech and CSIRO reports, 2024
$1.2B
estimated total AI investment across NZ/AU enterprises in 2024
Source: IDC, Asia-Pacific AI Spending Guide, October 2024
Government Policy and Regulation
New Zealand
NZ's approach to AI governance continued its careful, principles-based trajectory. Key developments:
The Algorithm Charter expanded. Originally focused on government agencies, the Algorithm Charter's influence extended into enterprise procurement as government buyers increasingly required AI governance assurance from vendors. While voluntary, it's becoming a de facto requirement for government-facing AI.
The Privacy Commissioner weighed in. Guidance issued in mid-2024 clarified how the Privacy Act 2020 applies to AI systems processing personal information. Key points: AI doesn't create exemptions from privacy principles; automated decision-making requires transparency; and overseas processing (including via AI APIs) triggers cross-border disclosure obligations.
Te Tiriti obligations shaped AI governance. NZ's unique governance context (Te Tiriti o Waitangi, the public sector duty to engage with Māori data sovereignty, including Te Mana Raraunga principles) continued to distinguish NZ's approach from global counterparts. Organisations deploying AI with implications for Māori communities or Māori data increasingly needed to demonstrate genuine engagement, not just compliance.
42%
of NZ government agencies have formal AI governance policies - up from 28% in 2023
Source: NZ Government Chief Digital Officer, Digital Government Report 2024
Australia
Australia moved faster on AI regulation in 2024, influenced by the EU AI Act and domestic momentum:
The Australian Government's AI Ethics Framework was updated with more specific guidance for high-risk AI applications. While still voluntary, it provided clearer expectations for enterprise adoption.
The Senate Select Committee on Adopting AI released its interim report in September 2024, recommending mandatory guardrails for high-risk AI use. This signalled a shift from purely voluntary governance toward a regulatory framework.
The CSIRO's National AI Centre expanded its advisory role, providing enterprise-focused guidance on responsible AI deployment. Their sector-specific playbooks, particularly for financial services and healthcare, became widely referenced.
Key difference: Australia is moving toward mandatory regulation for high-risk AI; NZ is maintaining its voluntary, principles-based approach. NZ enterprises serving both markets need to plan for the more stringent requirement.
Cross-Tasman Planning
Enterprises operating across NZ and Australia should build governance frameworks to the Australian standard (which is converging toward EU AI Act principles) while incorporating NZ-specific requirements around Te Tiriti, the Privacy Act, and the Algorithm Charter. Building to the higher standard means you're prepared for wherever regulation lands.
Enterprise Adoption
The Two-Tier Split
The most significant enterprise AI trend of 2024 was the divergence between two groups:
Tier 1: Foundation builders (~15-20% of enterprises). These organisations invested in shared AI infrastructure, governance frameworks, and organisational capability. They deployed 2-4 production AI capabilities during the year, each building on the one before. Their per-capability cost decreased over time. Their deployment speed increased. The compound advantage became measurable.
Tier 2: Experimenters (~60-70% of enterprises). These organisations ran multiple AI pilots, adopted individual AI tools, and generated significant internal interest in AI, but didn't build the infrastructure to scale. Their pilots delivered learning but limited operational value. Most remained disconnected from core business systems.
The remaining 10-20% had not meaningfully engaged with AI by year-end.
Adoption by Sector
| Sector | 2024 Maturity | Key Developments |
|---|---|---|
| Financial services | Leading | Production deployment of claims AI, fraud detection, customer service. NZ's major banks and insurers all have active AI programmes. |
| Government | Progressing cautiously | Significant pilots in biosecurity, health, social services. Governance frameworks maturing. Te Tiriti obligations shaping approach. |
| Professional services | Experimenting broadly | Widespread individual adoption of generative AI tools. Limited firm-wide deployment. Governance lagging behind usage. |
| Healthcare | Early but growing | Radiology AI gaining regulatory acceptance. Administrative AI (scheduling, coding) in pilot. Clinical AI facing regulatory barriers. |
| Education | Reactive | Responding to student AI use more than adopting institutionally. Policy development outpacing deployment. |
| Primary industries | Nascent | Predictive maintenance and quality control pilots in manufacturing. Agriculture AI primarily research-stage. |
56%
of NZ professional services firms report staff using AI tools - but only 12% have firm-wide policies
Source: NZLS Technology Survey, 2024
The Shadow AI Challenge
The most underreported AI story of 2024 was shadow AI: employees using consumer AI tools for work purposes without organisational oversight. Our estimate: 40-60% of knowledge workers in NZ/AU enterprises used AI tools at least weekly by year-end. Most did so without formal approval, data governance, or awareness of the risks.
This isn't a failure of technology governance. It's a signal. Employees adopted AI because it helped them do their jobs better. The organisations that channelled this demand into governed enterprise tools captured the value. Those that ignored or banned it pushed AI usage underground.
The Talent Market
Demand and Supply
68%
of NZ enterprises cite talent as their primary AI constraint
Source: NZTech, AI Skills Gap Report 2024
AI talent demand in NZ/AU exceeded supply across every category in 2024. The market dynamics:
Technical roles (data scientists, ML engineers): Demand grew ~40% year-on-year. Supply grew ~15%. NZ compensation for senior AI engineers reached $180-250K, competitive with Singapore but not with US tech company packages. Brain drain to offshore opportunities continued.
Applied roles (AI product managers, AI-literate business analysts): These roles barely existed in 2023. By late 2024, they were among the fastest-growing job categories. Supply was negligible because no formal training pipeline exists.
Leadership roles (AI strategy, AI governance): The scarcest category. Executives who understand AI deeply enough to govern it, invest wisely, and hold vendors accountable. Most organisations relied on external advisors for this capability.
The talent conversation in 2024 focused too heavily on data scientists and not enough on the applied and leadership roles that determine whether AI investments deliver. You cannot outsource the ability to identify the right problems and govern the solutions.
Dr Tania Wolfgramm
Chief Research Officer
What Changed in 2024
AI literacy became a hiring criterion across roles. Not just for technical positions. Marketing managers, operations leads, finance directors were increasingly expected to demonstrate AI literacy. The bar is still low (familiarity, not expertise), but the trend is clear.
Upskilling programmes proliferated. NZTech, universities, and private providers all launched AI skills programmes. Quality varied significantly. The most effective programmes were domain-specific (AI for insurance, AI for government) rather than generic.
Remote work expanded the talent pool. NZ/AU enterprises increasingly hired AI talent from other markets, enabled by remote and hybrid work models. This partially offset the domestic supply constraint but introduced management and IP complexity.
Investment Trends
Private Sector
$1.2B
estimated NZ/AU enterprise AI investment in 2024 - up 85% from $650M in 2023
Source: IDC, Asia-Pacific AI Spending Guide, October 2024
Enterprise AI investment nearly doubled in 2024, driven by:
- Budget formalisation: AI moved from discretionary innovation budgets to formal line items. 2025 AI budgets are being set during Q4 2024 planning cycles, often for the first time.
- Infrastructure spend: A significant portion of the increase was infrastructure (cloud compute, data platforms, integration) rather than pure AI capability. This reflects the shift from experiments to production.
- Tool proliferation: Enterprise spending on AI SaaS tools (Microsoft Copilot, individual AI subscriptions) grew rapidly, though much of this spend was uncoordinated.
Investment and Funding
The NZ/AU AI startup ecosystem remained small but active. Notable trends:
- NZ AI startups raised approximately $45M in 2024, up from $30M in 2023. Modest by global standards but encouraging for the ecosystem
- Australian AI startups raised approximately $850M, with a concentration in enterprise AI and healthtech
- International VC interest in NZ/AU AI increased, driven by talent quality and lower cost relative to US/UK
AI Startup Funding: NZ vs Australia (2024)
Source: IDC, Asia-Pacific AI Spending Guide, October 2024
Global Context
Global AI investment in 2024 was staggering. Anthropic raised $4B. OpenAI's valuation exceeded $80B. Google, Microsoft, and Amazon collectively invested over $100B in AI infrastructure. The implication for NZ/AU: the infrastructure, models, and tools are being built with global capital. The opportunity for NZ/AU is in application, deploying these capabilities in enterprise context with local expertise.
Ecosystem Development
The Partner Ecosystem Matured
NZ/AU's AI partner ecosystem evolved from a handful of specialists to a broader market:
- Global consultancies (McKinsey, Deloitte, Accenture) all expanded NZ/AU AI practices
- Local specialists (including RIVER) differentiated on deep NZ/AU enterprise knowledge, Te Tiriti awareness, and hands-on delivery
- Technology vendors (Microsoft, AWS, Google) expanded AI partner programmes and local teams
Key tension: The global consultancies bring brand recognition and methodology but often lack the hands-on technical delivery capability and local context knowledge that enterprise AI requires. Local specialists bring delivery capability and context but lack scale. The enterprises that navigated this landscape well matched the partner to the phase: strategy with one, delivery with another.
Research and Education
NZ universities expanded AI research and education programmes. The University of Auckland's AI Institute continued to grow. Victoria University of Wellington's AI research cluster gained international recognition. Canterbury and Otago expanded applied AI programmes.
The gap: industry-academia collaboration remained limited. Enterprise AI problems are practical, messy, and context-specific. Academic research is theoretical, clean, and generalised. Bridging this gap remains an opportunity for 2025.
Outlook for 2025
Five Predictions
1. Governance becomes table stakes. Voluntary governance will shift toward expected governance, driven by Australian regulation, EU AI Act influence, and enterprise procurement requirements. Organisations without formal AI governance will face procurement barriers and reputational risk.
2. The foundation builders accelerate. The compound advantage enters its exponential phase. Organisations with 2-3 production capabilities will add capabilities at increasing speed, opening a significant gap over those still in pilot mode.
3. AI budgets formalise and grow. 2025 will be the first year most NZ/AU enterprises have formal AI budgets. Average investment will increase 50-80% as organisations move from experiments to production.
4. The talent gap narrows, slowly. Increased training, remote hiring, and organisational investment in AI-adjacent skills will begin to close the gap, but demand will continue to outstrip supply through 2025.
5. Sector-specific AI matures. Generic AI tools will give way to sector-specific capabilities (insurance AI, government AI, healthcare AI) built on domain knowledge and regulatory understanding. The value shifts from the model to the application layer.
2024 proved that enterprise AI works, for the organisations that approached it strategically. 2025 is when the compound advantage becomes impossible to ignore. The gap between foundation builders and pilot experimenters will widen from months to years.
Isaac Rolfe
Managing Director
The NZ/AU Opportunity
NZ and Australia have genuine structural advantages in the AI era: smaller decision-making structures that enable faster adoption, strong governance instincts shaped by Te Tiriti (NZ) and strong regulatory traditions (AU), and a pragmatic approach to technology that favours value over hype.
The organisations that use these advantages, moving fast while governing well, will punch above their weight globally. The evidence from 2024 suggests this is already happening in pockets. The task for 2025 is to make it the norm.
- How does NZ/AU enterprise AI adoption compare to global averages?
- NZ/AU is roughly 12-18 months behind leading markets (US, UK, Singapore) in production deployment, but the gap is closing. NZ/AU governance maturity is comparable to or ahead of global averages, which positions the region well as regulation increases globally.
- What's the biggest risk for NZ/AU enterprises in 2025?
- Continued experimentation without foundation investment. The compound advantage means the gap between leaders and laggards accelerates. Organisations that enter 2025 without a platform strategy will find it increasingly difficult to close the gap.
- Is it too late to start an enterprise AI programme in 2025?
- No, but it's too late to start slowly. Organisations beginning in 2025 should invest in a foundation approach from day one, rather than repeating the pilot experimentation phase that defined 2023-2024 for early adopters. The lessons are available. The playbook exists. The advantage goes to those who execute.