Australian companies are increasingly adopting artificial intelligence (AI) technologies with careful consideration of the associated costs and benefits. Despite significant investments in AI and related technologies, business leaders emphasize the need to balance expenditure with measurable productivity gains.
Recent reports indicate a surge in corporate spending on software, including AI, with forecasts projecting a 15.5 percent increase in global software expenditure this year, following a 14 percent rise last year. This escalation is partly driven by hyperscalers investing heavily in data centers to support AI workloads, reflecting the growing demand for processing power.
Major Australian businesses such as Commonwealth Bank and Suncorp have reported rising technology-related expenses in the past year. Commonwealth Bank’s operating costs increased by 5.6 percent, attributed partly to technology investments, while Suncorp noted higher tech spending that was offset by savings in other areas. Suncorp’s chief executive, Steve Johnston, cautioned against unchecked cloud costs, describing the shift from hardware purchases to cloud storage as “all-you-can-eat,” which can make costs less visible until they impact financial statements. He stressed the importance of internal controls to manage these expenses.
Telecommunications provider Telstra has implemented frameworks to monitor real-time costs, performance, and security across hundreds of AI projects. Telstra’s executive Vicki Brady highlighted AI as a fundamental business enabler, emphasizing early attention to cost management. She noted the company is increasing AI usage while controlling costs, resulting in net positive benefits.
Financial institutions are similarly focused on ensuring AI investments deliver returns. Commonwealth Bank forecasts gross AI productivity benefits doubling to $400 million next year, expecting benefits to surpass costs for the first time. Matt Conmy of CBA stated that while costs are higher than anticipated, they remain within a fixed budget. National Australia Bank’s Andrew Irvine stressed that all business cases for AI are linked to cost-benefit analyses, with current adoption levels deemed manageable.
Other companies are exploring measures such as usage caps or deploying less expensive AI models for routine tasks. Wesfarmers CEO Rob Scott noted that understanding costs—from human resources to computing tokens—is essential, but highlighted operational successes from AI deployments. For instance, Google Cloud’s AI shopping assistant, used by over a million customers across Wesfarmers’ retail brands including Kmart and Target, has reportedly doubled online conversion rates and increased average transaction sizes. Additionally, Bunnings has saved around 500,000 employee hours on administrative work, allowing staff to focus more on frontline activities.
In the industrial sector, expectations for AI’s impact remain cautious. BlueScope Steel’s Tania Archibald acknowledged AI’s potential to enhance workforce productivity but called for clear evidence of bottom-line improvements. Meanwhile, Qantas CEO Vanessa Hudson advocated treating AI expenditure like capital investment, prioritizing productivity and efficiency gains that benefit both customers and shareholders.
At the same time, audit and financial oversight challenges persist in some sectors, underscoring the importance of transparency and accountability as companies navigate rising technology costs. Overall, Australian businesses appear committed to leveraging AI’s advantages while instituting disciplined approaches to cost management amid evolving competitive pressures and economic conditions.