Where NZ sits on the spectrum of AI adoption

Sunday, 9 November 2025

This week has seen more and more evidence, as if any more was needed, that billions of dollars are pouring into data centres to keep AI growth and development moving.

Among the jaw-dropping deals signed is one inked by OpenAI, which will pay $38 billion deal to buy cloud services from Amazon, as it pushes to power its future AI ambitions. Hundreds of thousands of Nvidia chips are part of the deal.

ChatGPT-maker OpenAI by itself has racked up US$1 trillion in deals to expand its AI capablity this year, according to a report from the Financial Times.

Also during the week, Australian firm Iren popped champagne after agreeing to a nearly US$10 billion deal with Microsoft to supply it with more data centre capacity, in a deal also involving gazillions of Nividia chips.

The companies taking part in what the Guardian has called a “US$3tr data centre spending spree” are racing to seed widespread adoption of AI tools and own the “means of production” of this technology. Investors are sold on the potential, piling into these companies making multi-billion dollar bets that they are backing an ubiquitous technology of the future.

There are fears that an AI bubble is forming, while others believe growth (in investment and big tech stock values) will simply continue to expand. So far, at the consumer and small business level, the technology is mainly aimed at replacing manual labour for repetitive and administrative tasks, and will likely be used in that way across households and workplaces in some shape and form if not now, then very soon.

According to AI Forum New Zealand, the adoption rate of AI in this country has accelerated significantly over the past six months, but it still sits well behind the adoption rates in other OECD countries, such as the United States, which is leading the charge in widespread adoption and the development of the technology.

Microsoft estimates 38% of working age adults in New Zealand are using AI.

New wave

AI in simple terms is a set of computer systems that can perform tasks requiring human intelligence, such as translating text, answering questions, writing code, summarising documents and creating video, based on prompts.

It is increasingly used for efficiency, to gain knowledge about what is happening and to create new products and services.

The new wave - agentic AI - takes action and completes goals autonomously, with the ability to reason and make decisions on its own. For example, it can research and compare prices, book and pay for an airfare.

Functioning as an assistant or agent, this AI can look at a situation and determine, based on what's happening, what should be done and take that action for you. It often has multiple agents working together to perform a task, or to solve a problem.

Academic and AI Institute of New Zealand director Albert Bifet says most local organisations are using basic AI or generative AI in their business as a means to make their workforces more productive, and to free up staff to focus on tasks that add more value to the organisation.

The benefits of using AI are seen to be to speed up completion of tasks that could ordinarily take days or weeks and to have operations continue working even when staff are not.

But there are some pitfalls, says Bifet, including lack of regulation, biases, and privacy or protection of data concerns.

Many are not using it over privacy concerns, but Bifet believes most are not using it as their competitors are not, and so they don’t feel a pressing need to use it to get ahead, like firms in fiercely competitive markets do.

“There are two groups of people and organisations in New Zealand, groups that are really using AI and having a competitive advantage using it, and other organisations that are not using AI or not interested in using it at all.

“I believe the reason why we are not using a lot of AI here is because the economy is based on primary industries.”

No plans

Recent findings from the Institute of Economic Research’s Quarterly Survey of Business Opinion (NZIER) found that 68% of small and medium businesses in this country - of which the economy is made up of more than 500,000 - have no plans to evaluate or invest in AI, citing a lack of understanding and the perceived absence of value.

This is despite Spark and NZIER’s joint research covering the state of New Zealand’s productivity issue identifying that these technologies could enable productivity gains far beyond labour productivity alone.

While SMEs are behind the adoption curve, more than 80% of large enterprises in this country are believed to be using it.

A report by Microsoft and Accenture estimated that generative AI could add up to $76 billion to New Zealand's economy by 2038.

As Bifet puts it, “AI can make work faster, smarter, and more creative. But it can also cause problems if used without care — like bias in data, privacy, lack of transparency, or overdependence on machines.”

The widespread belief that AI will create mass job losses is unlikely to be the case in New Zealand, Bifet says.

The more likely scenario is businesses will stop hiring, or hire less because of it.

“We’re going to change how we work. I can imagine a huge restructure of how we do things, and many people will need to change their job in the sense that they focus on how to be more creative. They will be able to be much more productive.”

In the same way the Internet changed the world in 20 years, AI will change it again in just five years, says Bifet. “The main difference with the previous revolution is that this one is going to be quick. I'm excited because that's going to open huge new opportunities, we're going to see huge advances in science, medicine and in health.”

Amazon Web Services chief executive Matt Garman says it is the most exciting time to be in tech, with AI the biggest change in technology that the world has ever seen.

“Generative AI is going to completely change every single company and industry and job that we have out there, and whenever that happens - which doesn't happen very often, that kind of transformative technology is an enormous opportunity to change; it's a disruptive force,” says Garman.

“It's a big opportunity for companies. It's a big opportunity for employees. It's a big opportunity for industries to rethink about how they operate…whether it's going to be finding cures for cancer, whether it's going to be discovering new minerals, whether it's going to be in our ability to deliver software, it's an incredible opportunity and an exciting time to be out there inventing.”

Fast follower

Global technology consultancy Accenture says AI has the ability to transform the way an organisation operates.

Justin Mowday, Accenture New Zealand managing director, says the country sat in the 21st place for global adoption of AI, but research says using it more widely would be “a huge unlock for the New Zealand economy”.

“If we do that it literally could be worth something like $73 billion of GDP, and that’s if we just moderately adopted AI across companies and government in New Zealand,” says Mowday.

“We need to be a fast follower, not a slow follower … to make sure that we can reap the benefits from it. AI requires some strategic investments in the right areas for a company, and that generally requires you to stop doing something else, and that always just takes a bit of time to work through.”

Mowday says he believes New Zealand was slow to adopt the technology as many businesses did not know how to implement it. “That's a lot of our conversation with clients.”

Innovation with emerging agentic AI is moving at pace, and so should firms thinking to use it, says Mowday.

“Workforces are being built elsewhere in the world ahead of us. That's an opportunity to learn and follow fast -- but we do need to get our skates on.”