SAP report finds AI adoption rising across Australia
20 July 2026 – New research commissioned by SAP suggests Australian organisations are increasing their adoption of artificial intelligence (AI), while governance, data readiness and workforce capability are developing at a slower pace.
The SAP Value of AI Report 2026, conducted by Oxford Economics across more than 2,600 business leaders in 13 countries, examines AI adoption, investment and organisational readiness.
According to the report, AI now supports 29% of tasks in the average Australian business, up from 25% last year. Australian business leaders expect that figure to increase to 48% within the next two years.
The research also found that Australian organisations expect to spend an average of AU$35.5 million on AI this year, compared with AU$27.5 million in 2025. Expected AI return on investment (ROI) was reported at 19% this year, with respondents anticipating further growth over the next two years.
Alongside increased adoption and investment, the report identified a number of areas where Australian organisations reported lower levels of readiness than the global average.
Only 22% of Australian organisations said they were mostly or fully prepared in AI governance, compared with 33% globally. The report also found that 42% of organisations said they were deploying AI agents faster than they could standardise and govern them, while 54% of business leaders reported employees were increasingly accepting AI-generated outputs without sufficient scrutiny.
Other findings include:
AI now supports 29% of tasks in the average Australian business, up from 25% last year.
Australian organisations expect to spend an average of AU$35.5 million on AI in 2026.
42% report deploying AI agents faster than governance processes can be standardised.
43% report they do not have human-in-the-loop processes for agentic AI workflows.
49% say AI agents have taken incorrect actions during pilot programs or deployments.
73% report poor data quality remains a challenge for AI initiatives.
82% are not convinced workforce upskilling is keeping pace with AI's rapid evolution.
77% report that employees use unauthorised or "shadow AI" tools at least occasionally.
Angela Colantuono, President and Managing Director of SAP Australia and New Zealand, said:
"Think of this as Australia’s AI school report: improving, but still not working to its potential. 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. And with multiple new AI obligations coming into play for Australia between now and the end of the year, driven by local and international regulation, organisations need to strengthen their data foundations, governance frameworks and leadership structures. Otherwise, we risk building the rails for an AI economy without being ready to run on them."
Commenting on the findings, Colantuono also said:
"The returns are starting to come but not fast enough, and not for everyone. AI value compounds over time. The organisations that act now, focus on the right end-to-end processes and get their data in order will look back in two years and be glad they did. The ones that wait will be asking why the gap got so hard to close."
The report also includes commentary from Professor Toby Walsh, Scientia Professor of Artificial Intelligence at UNSW's School of Computer Science and Engineering:
"Lack of understanding risks driving decisions by fear rather than evidence, and so closing the governance gap must start with closing the trust gap. Artificial intelligence is only valuable if people know when to trust it, and when to question it. Good governance shouldn’t be viewed as slowing innovation. It’s what allows organisations, employees and the broader community to adopt AI with confidence."
On workforce readiness, Colantuono said:
"These findings point to an urgent need for role-specific training, stronger safe-use guidance and change management that brings employees along as AI becomes embedded in daily work."
The report found Australia is making progress in generative AI adoption, with 53% of organisations reporting they are scaling or leading in generative AI implementation, close to the global average of 54%. However, adoption of agentic AI remains below the global average, with 19% of Australian organisations reporting they are scaling or leading compared with 24% globally.
The report concludes that many Australian organisations continue to adopt AI through individual projects rather than organisation-wide transformation, with governance, data quality and workforce capability remaining important considerations as AI adoption increases.
Concluding the report, Colantuono said:
"Australia has moved from AI hesitation to AI momentum. Now we need to turn that momentum into maturity: stronger governance, better data and a workforce ready to use AI with confidence. Get that right, and Australia won’t just catch up, it can lead the world in responsible, high-impact AI."
The SAP Value of AI Report 2026 was commissioned by SAP and conducted by Oxford Economics, surveying more than 2,600 business leaders across 13 countries.
More information on the research will be shared at the SAP NOW AI Tour taking place at the Hordern Pavilion in Sydney on 12 August. For more information or to register, click here.