Plenty of fibre, plenty of fear: New Zealand’s AI handbrake
Wednesday, 21 January 2026
Famed for its No 8 wire innovation and swift technological adaptation, some specialists fear New Zealand now risks becoming an AI backwater.
While Kiwi organisations are experimenting with AI tools, few have incorporated AI strategically as in Australia, says Kiwi Kerry Purcell, chief executive of international firm LAB3.
Sydney-based, West Coast-born and Christchurch-educated Purcell fears that tardiness is costing this country major growth opportunities.
He sees firms seemingly paralysed by fear and suspicion of the technology.
Read More:
Lab3 is an Australian company that provides cloud, data, security, network, and modern solutions.
It has offices in Auckland, Wellington, Melbourne, Sydney, Canberra and clients across both countries.
Purcell highlights four key ingredients to leveraging the AI revolution.
* Ensure the right infrastructure is in place to deliver AI solutions that improve lives
* Ensure trust and governance frameworks are in place to protect citizens and businesses around the uses of AI tools
* Ensure there is the talent coming through to grow and develop the right skills
* Ensure data/tech readiness
Infrastructure is off to a good start, trust and governance is being worked on by Government and business.
But talent is a bottleneck and data is currently fragmented and distributed in many different places.
New Zealand has advanced infrastructure with Microsoft's state-of-the-art data centres, but faces gaps in talent and data centralisation, with only 30-40% of its critical data in the cloud, Purcell says.
And yet it remains well-positioned to leverage AI for productivity and innovation, in the way Singapore and Finland have been able to.
Purcell emphasises the need for secure, shared data environments and education to effectively apply AI tools.
“We are in the first five minutes of a very long game, but our data is siloed - both broadly and within individual firms, which makes it hard for AI to use it effectively,” he says.
AI’s power is its ability to rapidly process huge amounts of data, but that data has to be of high quality and readily accessible.
'We’ve got the infrastructure,' Purcell says, pointing toward the massive commitment Microsoft has made with its new northern zone data centres.
'We have the 'fat pipes' leading to state-of-the-art centres. The box is ticked.'
But data needs work, he says.
'Data is sitting in 20 or 30 different locations. Some secure, some less so,' Purcell says.
Using the government sector as an example, he says centralised data would help a social worker trying to help a person in need, if they could swiftly access police or justice data.
At the moment, they can’t.
'You can't apply AI tools at the back of a garage server,' he warns.
The Cloud (online storage) can bring those shards together into a shared, secure environment where they can finally 'talk' to one another.
“The things that hold New Zealand back - they’re talent, and the readiness of the data.”
Wellingtonian Jo Cribb, co-author of Don't Worry About the Robots, sees a deep-seated, national cynicism as another barrier.
'We are incredibly reluctant, we’re super cynical about AI,' she says.
While the EU builds guardrails to foster innovation, New Zealand’s brightest talent flee to Sydney before they even look for a job at home, she says.
“When I was promoting Robots, the one thing that came back at me … was this huge fear, an existential fear … ‘I just don't trust this thing. It's, you know, it's American corporations, and I don't really trust my employee to be operating like all this’.”
“All the research shows we're in the cynical spot.”
Pat Pilcher, a veteran media spokesman in tech, sees the economy and our lack of productivity by world standards as encumbrances.
'New Zealand’s economy is in freefall,' he says.
“Everyone points to increasing productivity as a solution, yet the incentives for small businesses to modernise are virtually non-existent.”
It is a frustrating irony that New Zealand has world-class broadband but the cost of electricity is 'stupidly expensive“, Pilcher says.
Building a data centre is one thing; making it economic when power costs so much is another.
He says New Zealand is 'nibbling around the edges' of regulation while ignoring the core issues of generation and cost that make storage uneconomic.
Of course, data could be stored overseas, but there are rules and regulations around that.
“You could easily, very, very easily centralise a lot of the data storage and cloud infrastructure in New Zealand into probably, a very small number.
“Some of the big mainframes out there could easily do that job for the whole of the country. We are a very small market, so concentrating our data could be done.”
But if everything's all in one place, is it more vulnerable?
“Yes,” Pilcher says.
“It's like, when you had a PC, they had floppy disks. You backed up your data on your PC. Those discs were then kept but if you were really smart, you gave someone else a copy of those discs elsewhere, so if your house burnt down they would be safe.
“And in New Zealand, where it's seismically active, having your data spread out makes a lot of sense. I mean, the whole world is only 120 milliseconds away, when you're a piece of data.”
Purcell, Cribb and Pilcher all agree New Zealand is in an unique position, if it can only pull the pieces together.
Purcell says New Zealand can 'leapfrog' traditional cycles of heavy application investment.
Because the country is small, centralised, and trusted - part of the Five Eyes intelligence alliance with Australia, Canada, the United Kingdom, and the United States - it is seen to have high ethical standards.
It is more nimble than larger, more complex nations.
'AI is not a panacea,' Purcell says.
'It’s just another tool, like the internet or mobile apps. But it’s different because it’s leapfrogging everything I’ve seen in 30 years.
“New Zealand still has a long way to go in firstly, understanding where their data sits.
“Even in your business, Stuff may have some data that sits in the cloud, some of it sits on your laptop, some sits on your hard drive.
“Well, that's actually not much use. It's probably useful to you, it’s not useful to the business … it needs to be where anyone can access it, look at it.
“The first step for a business using AI is understanding where you're at. What problems do I have, what business problems do I have?
“In order to solve those business problems, outlook at what you need to do before jumping in to solve it.”
The story of AI in New Zealand isn't about the technology itself; it's about whether a country of five million people can stop looking at their own feet.
Can it merge the data, trust the process, and finally use that Number 8 wire to plug into the global grid?