Banal? Perhaps. But Green, emeritus professor and special innovation advisor at UTS, says it has enormous value, eliminating variability, improving quality, optimising production processes and delivering measurable productivity and quality improvements. While it might not be making headlines, it may tell local businesses more about AI’s future than the latest wave of generative AI announcements.

“They turned the general-purpose AI into industrial AI to improve productivity of their manufacturing and create new opportunities.”

Green has been heading up a nine-month research program led by the University of Technology Sydney, looking at how organisations are putting AI to work in the real world. Rather than focusing on frontier models – which Green told iStart are beyond Australia and New Zealand to develop with their huge financial investments – the team looked at how manufacturers, technology companies and research institutions were applying existing AI technologies to solve practical business problems.

What they found was a common pattern: Successful organisations are turning general purpose AI into industrial AI – and reaping the benefits.

Green defines industrial AI as ‘the application of general-purpose AI to physical products and systems.

“It’s just whatever suits the production process that you’re applying it to,” he says. Rather than being a separate category or technology, it can involve generative AI, agentic AI, digital twins, sensors or smaller language models, with a common threat that the AI is applied directly to physical systems to improve productiity, quality and competitiveness.

For Green, industrial AI is about more than productivity. It’s about economic survival. Australia’s manufacturing sector has fallen from around 30 percent of GDP in the 1960s to roughly five percent today, while countries such as Germany continue to use advanced manufacturing to drive innovation and R&D investment. Industrial AI could help reverse that decline by enabling manufacturers to produce smarter, higher-value products and compete in global markets without trying to match overseas rivals on scale alone.

When machines talk back

While much of the AI conversation in Australia and New Zealand remains focused on copilots, content creation and workplace productivity, many European and Nordic organsiations are embedding AI directly into production systems, machinery, manufacturing processes and robotics.

“We visited several in the Netherlands, Germany, the Nordics,” Green says. “They had one common theme, that they turned the general-purpose AI into industrial AI to improve productivity of their manufacturing and create new opportunities.”

Some of the applications, like the screwdriving project in Dortmund, Germany, were surprisingly simple and unlikely to feature in a keynote presentation, but nonetheless adding ‘enormous value’.

Elsewhere, the researchers encountered examples involving sensors, digital twins and AI-driven manufacturing optimisation.

At Siemens in Munich, operators are already interacting with industrial systems through a ChatGPT-like interface. Instead of manually coding robots, workers can tell machines what they want in natural language, with the system generating the required code automatically.

“The screen just says, ‘How can I help?’,” Green says. “You just type in what you want, and it interprets through language how the machine should operate.”

It’s a glimpse into the world of physical AI: AI embedded into machines, robotics, warehouses and production environments rather than operating solely in software.

And it’s a market which is attracting growing attention from investors. Physical AI startups focused on warehouse automation, robotics and autonomous industrial systems attracted US$8 billion in venture capital funding during the first half of 2026, according to PitchBook.

From consumer to creator

For Green, however, the more important story is what happens next in Australia and New Zealand. He argues that there is a risk both countries will become merely consumers of AI, rather than creators of value from it.

Industrial AI, he says, will be fundamental for A/NZ to escape that future. “Otherwise we’re just hosting data centres here as landlords,” he says. “They come here, they use up all the energy and the water, thanks very much, and export their data, which doesn’t mean anything to us because it’s all going out of wire somewhere. All while sucking our IP dry in the process.”

He’s critical of strategies that focus exclusively on attracting hyperscale infrastructure while overlooking opportunities to apply AI to domestic industries and production systems. Instead, he believes organisations should be identifying specific operational problems where AI can improve competitiveness.

The research also challenges the assumption that businesses need access to enormous frontier models to achieve results.

“For a lot of industrial applications you only need a small language model,” Green says. “We can develop those here, not very expensively.”

That may be particularly relevant for Australia and New Zealand organisations searching for pragmatic returns on AI investments. Rather than spending heavily on frontier models, organisations can deploy smaller, purpose-built models trained for specific tasks such as equipment monitoring, quality assurance or operational support.

Industrial AI, Green says, should not be viewed as a technology reserved for automotive giants or multinational manufacturers.

“No matter how big or small you are, you can make use of industrial AI and implement it in production systems and in the creation of new products,” he says.

The opportunities extend well beyond manufacturing. New Zealand’s horticulture sector, food producers and packing houses are obvious candidates, while Australia’s mining, manufacturing and resources industries are already rich in operational data that could be combined with AI, sensors and digital twins to improve quality, productivity and decision making.

Winning ecosystems

The research found successful innovation ecosystems consistently shared a similar structure. High-quality research institutions worked closely with industry. Large anchor organisations helped attract investment and talent. SMEs participated in connected supply chains. And businesses collaborated, rather than operating in isolation.

“It’s better to work in a clustered, place-based environment,” Green says.

For CIOs and business leaders, Green’s advice is less about chasing the newest AI release and more about identifying where AI can improve physical operations, products and production systems.

The companies making progress in Europe are not waiting for perfect conditions. Nor are they mesmerised by whichever model tops the benchmark charts this month.

“The lesson,” Green says, “is don’t get ready. Get started.”

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The number of New Zealand businesses registered to receive eInvoices – which enable businesses to send and receive invoices directly between accounting systems – has more than doubled from 52,000 to 113,000 in the past year.

“According to the research, businesses can save around 16 minutes and $11 on every invoice processed through eInvoicing.”

At the same time, NZIER research released by Small Business and Manufacturing Minister Cameron Brewer estimates widespread eInvoicing adoption could deliver up to $800 million a year in productivity gains.

According to the research, businesses can save around 16 minutes and $11 on every invoice processed through eInvoicing. Scaled across the economy, that could add up quickly, particularly for organisations processing thousands of invoices each year.

More importantly for business leaders, eInvoicing is becoming harder to ignore.

Last October the government introduced rules requiring government agencies to mandate eInvoicing for large suppliers – including Australian businesses – from January 2027. The move is designed to support faster payments and reduce administrative overheads across supply chains, but it also signals a broader shift in how governments expect businesses to exchange invoices.

“We’re not just asking businesses to make the switch, we’re doing it ourselves. When government pays on time, that money flows straight through to the small businesses and subcontractors down the chain,” Brewer says.

The billion-dollar pitch

The latest figures provide an interesting update on some of the ambitious forecasts made when Australia and New Zealand first started promoting eInvoicing more aggressively.

Back in 2023, the when the then prime ministers of both countries signed off on a joint statement confirming agreement to use OpenPeppol, economic gains of up to $30 billion across both countries over a decade were projected from eInvoicing use and related digital trade initiatives. New Zealand’s share was estimated at NZ$4.4 billion over 10 years, or roughly $440 million annually. At the time, uptake remained relatively modest and critics questioned whether businesses would ever embrace the technology at the scale required to unlock those benefits.

Three years on, the conversation has become more practical.

Instead of talking about transforming the trans-Tasman economy, ministers are talking about saving 16 minutes per invoice. Instead of promoting billion-dollar opportunities, they’re pointing to 113,000 businesses already connected to the network. Ironically, that more grounded message may be proving more persuasive than the grander vision ever was.

The shift isn’t unique to New Zealand with countries around the world pushing down similar paths. From September, companies exporting to France will be required to issue and receive invoices electronically, with Germany, the Philippines and the UAE following in January.

In Australia the federal government is establishing eInvoicing as the default method for exchanging invoice information in government procurement and has set targets requiring federal agencies to increase the proportion of invoices received through the Peppol network. Officials there are promoting many of the same benefits being highlighted in New Zealand: Improved productivity, stronger cashflow and reduced fraud.

While neither government has mandated economy-wide business-to-business eInvoicing, they are steadily building procurement requirements that make participation harder to avoid.

Adoption challenges

One reason eInvoicing adoption has taken longer than advocates predicted is that the technology has occupied an awkward middle ground between obvious and annoying. The benefits were rarely disputed, but neither was the reality that for larger organisations this is rarely just a switch-flip exercise. Configuring ERP, finance and procurement systems, onboarding trading partners and navigating Peppol requirements required more effort than many organisations were prepared to invest.

Peppol’s network uses a ‘four-corner model’ – a supplier (corner 1) sends an invoice to its service provider or ‘access point’ (corner 2), which then queries the DCL (digital capability locator) using the receivers identifier such as the ABN or NZBN. The DCL then provides the suppliers access point which access point the buyer is using so the invoice can be routed through the Peppol network to the buyer’s service provider (corner 3) to deliver to the buyer (corner 4).

While OpenPeppol was designed to simplify document exchange by allowing businesses to connect once and exchange invoices with any other participant on the network, organisations still needed a reason to prioritise the work.

What appears to be changing is not the technology itself, but the growing pressure to adopt it.

Whether New Zealand ultimately realises $800 million in annual productivity gains remains to be seen. But, after years of forecasts, policy papers and industry evangelism, eInvoicing may be crossing an important threshold.

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While model prices are falling and capabilities are improving, businesses are handing increasingly complex work to AI agents. What starts as a few prompts quickly becomes research projects, workflow automation, reporting, coding and decision support. The result is a new challenge for CIOs and CFOs: How do you keep AI costs under control when adoption is exactly what you want?

“The real metric is ‘useful work per dollar’, not simply the cost of individual AI transactions.”

A recent report from cloud finops and spend management company DoIt found 79 percent of the 500 US and UK enterprises surveyed were experiencing AI cost overruns. Meanwhile, Flexera’s 2026 State of ITAM report tells a similar story, saying  just 31 percent of organisations have visibility into their AI software, while 59 percent report increased wasted AI spend.

As iStart reported recently, the AI free lunch is starting to look not so free anymore. Uber revealed it had exhausted its entire 2026 AI coding budget in just four months, driven by token-maxxing where engineers were encouraged to maximise usage. Another unnamed company reportedly accrued a US$500 million bill for Anthropic Claude use in a single month after giving staff unrestricted access and uncapped API token usage for agentic workflows.

That shift has prompted OpenAI to publish guidance on managing AI investments in the agentic era.

Cheaper AI, bigger bills

One of the more interesting observations from OpenAI’s guidance is that leaders should stop obsessing over token prices and start focusing on outcomes. The company argues the real metric is ‘useful work per dollar’, not simply the cost of individual AI transactions.

That matters because lower prices do not automatically translate into lower spending. In fact, history suggests the opposite. When cloud storage became cheaper, businesses stored more data. When cloud computing became more affordable, they ran more workloads. When video meetings became easier, calendars filled and network infrastructure requirements grew.

AI is following the same pattern. As employees gain confidence, they use it for bigger projects, more complex tasks and increasingly business-critical processes. Lower costs remove barriers to experimentation, which often accelerates adoption rather than reducing the bill.

Start with visibility

OpenAI’s first recommendation is visibility. Leaders need to know who is consuming resources, which models are being used, which departments are generating demand and what business outcomes are being achieved.

“Without that visibility, a growing bill is hard to interpret. It could reflect waste, productive experimentation, or a workflow that is starting to become business-critical,” OpenAI says.

Outcomes, not activity

The second recommendation is efficiency. OpenAI warns that cheaper models may not always produce the best result if they require additional attempts, generate lower-quality outputs or create work requiring extensive human review. A more capable model that gets the answer right first time may be cheaper overall than a budget option that needs repeated prompting.

Rather than measuring prompts, queries or tokens, organisations should focus on outcomes such as cost per customer case resolved, contract renewed, report generated or software feature delivered. The goal is to match the model and workflow to the task: use smaller or faster models when they meet the quality bar, and reserve frontier intelligence for complex, ambiguous or high-stakes work.

Governance, growth and getting serious

Governance is the third plank. OpenAI argues organisations need clear policies and controls as AI adoption grows, and that governance should work as “the operating layer that determines which AI work can scale”. That includes expectations around approved tools, data usage, security requirements and oversight of high-impact workflows, particularly as agentic systems take on more autonomous tasks.

OpenAI also recommends investing in AI workflows that become more valuable over time. Rather than spreading spending across dozens of disconnected experiments, it suggests prioritising repeatable processes that can scale across teams, improve with use and create lasting operational benefits.

The final message is simple: do not assume today’s AI usage levels are the ceiling. As agentic AI becomes more capable, employees will find new ways to use it, driving additional demand across the business. Rather than being surprised by rising consumption, organisations should expect it, budget for it and put visibility and controls in place early.

In other words, if the AI bill is growing because people are finding genuine value in the technology, that is not necessarily a problem. The challenge is knowing the difference between productive growth and expensive curiosity.

Which brings us back to that US$55 trillion bill. An AWS billing system fault last week generated estimated invoices ranging from billions to trillions of dollars. The estimates were wildly incorrect, but the broader lesson stands: Technology costs are easy to ignore right up until they become impossible to explain.

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Every document uploaded, process automated and workflow handed to AI is helping build systems that could eventually outperform the very businesses feeding them. Productivity gains are real, he told iStart, but so are the unintended consequences, particularly for companies deploying AI without fully understanding where their data, knowledge and intellectual property end up.

“Everyone disregards the unintended consequences until it bites.”

A recent report found 40 percent of Australian office professionals have entered customer data or information into public AI tools, with 28 percent admitting inputting financial information or disclosing confidential company documents or strategies. Shadow AI Survey also noted that 70 percent of those surveyed have used AI tools or services at work despite not being allowed under company policies – and over half (53 percent) have faced formal consequences, such as a warning or disciplinary action, due to unauthorised AI use.

But Robb argues the issue isn’t simply whether staff are using AI. It’s how organisations are using it, what information is being shared with AI systems and whether anyone has thought through the consequences.

“Everyone disregards the unintended consequences until it bites,” he says.

Robb believes most employees are acting with good intentions. They’re looking for faster ways to complete tasks, improve reports and eliminate repetitive work. In many cases, they’re right: AI can dramatically improve productivity.

The problem is that productivity gains can obscure risk.

One of Robb’s biggest concerns is the amount of organisational knowledge being fed into public AI platforms. As staff upload documents, workflows and business information to improve outputs, organisations may be unintentionally giving away IP and expertise.

“[The foundation model providers] own the IP and you are training them to be better than you are,” he says.

Last month, Microsoft CEO Satya Nadella warned about the unintended consequences of AI, including the ‘reverse information paradox’ where enterprises unknowingly give away their proprietary institutional knowledge and competitive advantage simply by utilising third-party AI systems to boost productivity.

That’s just one unintended consequence Robb says companies need to consider as AI adoption accelerates. Another is the ease with which well-intentioned employees can create data exposure risks while trying to be more productive.

That, however, isn’t a new phenomenon. He recalls regularly dealing with incidents at a major bank where staff moved documents outside secure environments in order to work faster – sending a PDF to their home PC to convert it and send back to the work PC, for example. The intention was never malicious. Employees were simply trying to get the job done. But once sensitive information left the bank’s systems, a security breach had occurred and it was a summarily dismissible offence.

Robb sees similar behaviour emerging around AI tools today.

“Now, if I’ve loaded company data in to get that, that company’s got a genuine exposure,” he says.

For tech leaders, that means the challenge is no longer just identifying unauthorised AI use. It is understanding what information employees are putting into AI systems and whether appropriate guardrails exist around that behaviour.

Robb says regulated organisations, particularly financial institutions, have already invested heavily in governance and controls. “Banks have already stopped their people sending data to their iPads. It’s really hard to get data out of a bank or an insurance company.

“But when you’re a smaller business, the data’s everywhere.”

At the same time, companies are moving beyond AI experimentation.

Many of the early AI projects focused on incremental improvements – better reports, improved customer service or small efficiency gains. Robb says the next phase is different as businesses start to redesign entire processes around AI.

“It’s moved from incrementalism to step changes in processes.”

That shift creates new opportunities but also new risks. He cites the example of a plumbing business that has automated significant amounts of administrative work using AI. Compliance documentation and other repetitive tasks that once required multiple staff are now largely automated. The business gains efficiency, reduces effort and lowers its cost to serve customers.

The broader question, however, is what happens when competitors follow.

“If you have a lower cost to serve, you will kill your competition. Ai is a lower cost to serve.”

For business leaders, that’s a reminder that AI governance isn’t just about risk management. It is also becoming a competitive issue. Organisations that fail to adopt AI may find themselves at a disadvantage. Organisations that adopt it recklessly may create security, compliance or intellectual-property problems they don’t yet understand.

So what should companies be doing now?

Robb’s answer, unsurprisingly given he runs an AI governance consultancy, is governance. Not governance as a brake on innovation, but governance as a way of avoiding the ‘we’ll deal with that later’ approach that has accompanied many AI deployments. The question, he says, isn’t whether organisations should use AI. It’s whether they’ve thought through what happens when productivity gains collide with compliance obligations, security risks or unexpected business outcomes.

He says every organisation deploying AI into production should have a governance plan appropriate to its size and risk profile. For larger organisations, that means asking practical questions:

Does the AI initiative have board approval and a defined business outcome?

Is a human accountable for customer-impacting decisions?

If you lost control of your AI model, could you regenerate using using paper and pen, the data and the answers to get to the same position within 24 hours?

Does the business understand what data is being shared with AI tools?

An AI governance pack Robb’s company developed for banks and listed companies warns that AI governance is no longer optional and ‘we have a policy’ is no longer an answer – and ‘we are not doing anything yet’ is not a defence.

The pack outlines six guardrails:

• Strategic alignment – is AI use tied to risk appetite and corporate strategy),
• Accountability – who owns each AI system end-to-end?
• Explainability – can you explain a decision to a regulator or customer?
• Human oversight
• Monitoring and adaption – are models monitored for drift, bias and performance, and
• Organisational ethics

“If your board cannot score itself against these six, you do not yet have AI governance,” the pack says.

Smaller businesses? They’re exempt to some degree, he says. “If you’re say a five person plumbing business and you’re using AI to do training or something, honestly, congratulations, you’re curious, you’re using the tools. You don’t need a governance plan because you’re aware of the boundaries of what you’re doing.”

Putting in the wrong parts won’t be the end of the world – and it’s probably something you sometimes did pre-AI anyway.

Robb isn’t advocating caution at the expense of innovation. In fact, he believes many organisations across Australia and New Zealand have been too slow to realise AI’s potential.

Instead, his message is to stay curious, move quickly and prepare for the downsides, rather than ignoring them.

“AI is more valuable than it is detrimental,” he says. But organisations also need a plan for what happens when something goes wrong.

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The scathing ‘rapid review’ – commissioned by Public Service Commissioner Brian Roche after the Government Digital Delivery Agency (GDDA), which previously sat under the Department of Internal Affairs, was moved under the Public Service Commission – found widespread concerns about the way technology projects are governed, funded and managed across government. It concluded the system lacks visibility into the nature and value of technology investment, struggles to coordinate major projects and has a central digital function that is focused more on administration than strategic leadership.

“This review gives us a clear picture of what’s working and what’s not.”

The findings are unusually blunt for a government review.

Among the more damning observations were comments from agency leaders who said the GDDA often failed to provide the expertise or leadership needed to deliver projects.

One agency leader quoted in the report says the central digital function had simply helped them ‘admire the problem’ without making project delivery any easier. Another says the organisations focused on process, rather than outcomes, while others questioned its ability to broker common solutions across agencies.

The review, which was led by former Auckland Airport chief executive Adrian Littlewood, Justin Gray (former managing director of Datacom) and transformation advisor and former Kāinga Ora CEO Matt Crockett, found the problems ran deeper than any single agency. It identified a fragmented system, lacking complete and timely information and missing the urgency to drive change, despite investing $42 million a year in the central digital function. The system was characterised by fragmented accountability, duplicated investment, weak prioritisation and poor information. Agencies were found to be pursuing similar projects independently, competing for scarce technology resources and in some cases building systems that could have been shared across government.

Examples cited in the review include multiple agencies pursuing digital identification initiatives with limited coordination, an agency developing its own payments system rather than reusing existing and mature payment systems operated by another agency, and two related organisations – in the same building – tendering for new systems independently before wider integration issues were considered.

The report notes these issues have emerged despite the existence of a central digital foundation intended to identify common opportunities and drive all-of-government outcomes.

Perhaps most concerning is the review’s conclusion that government lacks reliable information about its own technology investments.

“It was hard to get fundamental metrics to judge performance of tech investment across the agencies and there was limited understanding on baseline tech spend funded through appropriations vs project spending,” the report notes.  Existing reporting was described as largely focused on expenditure and activity, rather than business outcomes and public value. Limited central visibility into agency spending – with ‘skunk-works’ projects hidden in budgets and financial reporting, is also creating accountability problems, with some tech initiatives effectively hidden within operational budgets.

The review says this lack of information makes it harder to prioritise projects, assess risk and direct investment to the areas likely to generate the greatest benefit.

While the report focuses on public service IT, many of the problems it highlights will sound familiar to enterprise leaders. Large organisations frequently face similar challenges around technology sprawl, competing priorities, duplicated systems and limited visibility of investment outcomes. The challenge of balancing business unit autonomy against enterprise-wide standards is hardly unique to the public sector.

But the review highlights how much more difficult the issues become when multiple agencies, funding streams and ministerial priorities are involved.

It’s also highly critical of the current funding and approval process, saying the existing model is designed for large capital infrastructure projects rather than the fast-moving, iterative nature of modern digital delivery. Agencies often struggle to obtain funding for smaller technology initiatives, leading some to seek approval for larger projects than necessary, hide smaller discretionary projects within IT operating budgets, delay sensible upgrades or allow tech debt to grow.

The review argues current settings can actively discourage investment and innovation.

It notes agencies face lengthy approval processes while governance structures often lack the authority to make meaningful decisions or resolve trade-offs across government. Interviewees described a culture where avoiding mistakes is rewarded more than delivering value and where activity can become a substitute for outcomes.

The review also notes that engagement with tech providers is inconsistent and does not support long-term partnerships or co-investment.

Resetting for digital delivery

Roache says the review provides a solid base for a reset as part of the work to transform the public sector.

“This review gives us a clear picture of what’s working and what’s not,” he says.

To address the issues the review proposes a three-part reset.

The first focuses on prioritisation, including an assessment – led by GDDA with support from Treasury and key agencies – of digital projects across government and the reallocation of resources towards higher-value initiatives. Low-value or conflicting projects could be paused or retired, with investment concentrated on programs deemed most likely to deliver impact. Identifying ways to ‘self-fund’ new investment by reprioritising existing funding and making short-term operating and process changes that deliver ahead of new technology is also a key output identified.

The second focused on repositioning the GDDA itself. Rather than acting as a project delivery organisation, the agency would become a smaller, but more capable, strategic authority responsible for standards, assurance, architecture, procurement and system-wide capability. Delivery responsibility would sit with lead agencies, while the GDDA would be expected to provide expertise, direction and accountability, retaining lead on strategic procurement via a panel model for common/functional services such as cloud.

The third track targets structural reform across government, including changes to funding models, governance arrangements, accountability frameworks and reporting requirements. Legislative changes could also be considered to provide clear boundaries or support for critical enabling tech projects, such as ‘bundled consent’ options for citizen data.

The review also recommends more consistent measurement of technology costs, performance and benefits across agencies.

Underlying the recommendations is a belief that technology should be treated less as an IT function and more as a driver of productivity and service transformation.

The report cites Inland Revenue’s business transformation as evidence that major gains are possible when governance, funding and delivery settings are aligned. It also highlights potentially significant productivity opportunities in areas such as health, where technology-enabled improvements could generate substantial efficiencies if barriers to delivery were removed.

The message from the review is straightforward: New Zealand does not necessarily have a technology spending problem. It has a prioritisation, governance and execution problem.

The government’s proposed digital reset aims to fix that. Whether it succeeds may depend on whether the public sector can do something the report suggests it has struggled with for years: Stop talking about transformation and start delivering it.

Roche says he will consider the findings of the review before making decisions on ‘a way forward’.

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The initiative marks the global financial messaging network’s first production use of a blockchain-based ledger and is being positioned as a way to enable funds to move overnight and on weekends while remaining within the regulated banking system – and compete with the emerging stablecoin market.

“We see strong potential to help customers move funds in real-time and manage liquidity more flexibly.”

Banks from six continents are taking part, including ANZ, Citi, HSBC, Lloyds Banking Group, UBS, Wells Fargo and Standard Chartered. Swift (the Society for Worldwide Interbank Financial Telecommunications) says participating banks will use the shared ledger as an orchestration layer for bank-issued tokenised deposits on their own infrastructure, allowing institutions to move value before final settlement is completed through existing banking systems.

For ANZ, the trial expands a digital assets strategy the bank has been pursuing for several years, including work with tokenised assets and blockchain-based settlement technologies.

Lisa Vasic, ANZ managing director transaction banking, says the bank is working with Swift and global partners to ‘securely scale next-generation payments infrastructure’ and deliver ‘more efficient, always-on payment capabilities’.

“By combining Swift’s trusted network with this new infrastructure, we see strong potential to help customers move funds in real-time and manage liquidity more flexibly,” Vasic says.

Beyond crypto and speculation

Blockchain has struggled to find a use case within business. For much of the past decade, the technology, initially hyped as the foundational technology for Bitcoin and decentralised digital currency, has been associated more with cryptocurrencies, speculative trading and fraud than practical enterprise applications. Despite billions of dollars invested globally, and plenty of attempts, relatively few large-scale business deployments have emerged outside digital asset markets.

The distributed ledgers have been trialled for everything from smart contracts that automatically execute when predetermined conditions are met, to supply chain tracking systems designed to create tamper-resistant records of product governance and movement. But while some have delivered niche benefits, few have achieved widespread adoption at scale – and there have been several high profile failures. Maersk and IBM shuttered the TradeLens blockchain-enabled global trade platform in 2022 after five years work, blaming an apparent lack of interest and trust from the industry. The ASX’s blockchain-powered Chess settlement and clearing system project meanwhile went down in a ball of flames – labelled a ‘profound failure’ by the chair of a parliamentary joint committee on corporations and financial services, and leading to an AU$250 million writedown.

The payments difference

The Swift initiative sees some of the world’s largest banks using the technology to tackle an issue that has frustrated businesses for decades: The limitations of cross-border payments.

International transfers remain constrained by time zones, banking hours and fragmented settlement processes. While businesses have become increasingly digital and globally connected, moving money internationally often remains slower than moving information.

Swift believes tokenised deposits operating over a blockchain-based ledger could help bridge that gap. The organisations says the new capability would allow banks to support 24/7 cross-border payments while maintaining the compliance, risk management and control frameworks already embedded into the global financial system.

“It allows tokenised value to move across borders with the velocity and flexibility modern commerce expects, while maintaining the same high levels of resiliency, security and compliance global finance requires,” says Thierry Chilosi, Swift chief business officer.

The approach differs significantly from public cryptocurrency networks.

Rather than creating an alternative financial system, Swift’s ledger is designed to sit alongside existing banking infrastructure. Participating banks continue issuing and managing deposits, while the ledger provides a common mechanism for coordinating transactions between institutions. Final settlement still occurs through established banking channels.

That distinction may prove critical.

Many organisations have shown little appetite for holding cryptocurrencies or exposing core treasury processes to public blockchain networks. The involvement of the 17 banks suggests growing interest from major financial institutions in tokenised deposits as a way to improve payment availability and liquidity while remaining within established regulatory and banking frameworks.

Swift says banks will be able to move tokenised funds around the clock, including outside normal business hours, helping businesses access capital more quickly and manage liquidity more efficiently.

Testing blockchain’s real value

The launch also appears to reflect a broader shift taking place within the banking sector, with many major financial institutions increasingly focused on determining where exactly blockchain can deliver measurable value. Cross-border payments have emerged as one of the strongest candidates because they involve multiple organisations, multiple jurisdictions and significant coordination requirements – all characteristics that align naturally with distributed ledger designs.

In effect, the trial represents blockchain being used for what it was arguably always designed to do: Maintain a trusted and shared record between parties that do not directly control the same systems.

Swift says the shared ledger, first announced last year, was designed and built with feedback from international financial institutions.

“The strong support from banks shows the practical value of this approach,” Chilosi says, adding that it will help scale benefits globally while creating a foundation for future innovation in areas like programmable money and agentic commerce, where automated systems execute transactions and payments on behalf of users.

The scale of the network involved also gives the initiative significance. Belgium-based Swift underpins the vast majority of international bank messaging and says its infrastructure connects more than 200 markets worldwide.

While enterprise blockchain initiatives have often generated considerable hype before falling short of expectations, Swift’s initiative targets a clearly defined operational problem and is backed by institutions already responsible for moving trillions of dollars through the global financial system.

For ANZ and its banking peers, that may ultimately prove blockchain’s most natural home: Not replacing banks, but helping them move money faster.

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AppWrap July 2026

13.07 Kiwi AI spatial intelligence platform company Hyades has raised $1.5m in seed capital from investors including Allbirds co-founder Tim Brown, Stephen Tindall and Icehouse Ventures. The $1.5m includes a $400,000 MBIE R&D grant. Hyades’ platform converts geospatial data from disparate sources into a single machine learning ready format, with use cases including insurance risk modelling, B2Bnews reports.

11.07 Meta has abruptly pulled a controversial AI tool which enabled people to create fake images from user content on Instagram. The feature, part of the Muse Image rollout, quickly sparked blowback due to privacy concerns as anyone with a public account could have their likeness used without their permission or knowledge, the BBC reports.

09.07 The government has withdrawn plans to ban cryptocurrency ATMs and will instead establish regulation making powers enabling the government to cap or restrict cash transactions for virtual assets, 1news reports.

08.07 Datacom Group has recorded revenue of $1.58 billion for the year ending 31 March 2026, up from $1.48b a year earlier. Company records show net profit dropped from $37 million to $20 million.

08.07 CDC Data Centres NZ saw significant increases in revenue and gross profit in the year to 31 March 2026, but logged a $87.7 million loss on the back of higher financing costs and property write-downs. The company’s financial records show revenue jumped 52 percent to $134.5 million.

07.07 ACC has completed a migration of its core claims, payments and provider functions to a cloud-based platform. ACC says the program took two years but was completed on schedule.

07.07 A hacker is selling what they claim is live Teletrac Navman telemetry data from almost 3,000 Australian and New Zealand organisations. CyberDaily reports the hacker claims to have exfiltrated continuous real-time GPS tracking data for 2,988 customer companies across A/NZ, over a 48 hour period, with the data including emails and mobile phone details for drivers, driver’s licenses and vehicle registration details.

07.07 The Tech Users Association of New Zealand (Tuanz) is advocating for a shift to ‘active agency’ in data use, pushing organisations to move away from passive consent models such as long – unread – privacy policies. The initiative is part of Tuanz’ 2026 policy program. It’s calling for the government and industry to adopt a standard for explainable AI, adopt standardised ‘data nutrition labels’ allowing consumers to compare data practices at a glance and enable true individual control though expansion of the Consumer Data Right, while also upholding Māori data sovereignty.

03.07 Immigration NZ’s $336m Our Future Services visa processing rebuild, which began last year, has failed to meet its first stage goals, RNZ reports.

02.07 A review of the digital revamp of government services says investment is fragmented with duplication and limited coordination, and the key Digital Delivery Agency has ‘limited influence’ over key decision on funding design and procurement, RNZ reports. A reset has been signalled.

02.07 Google Maps has gained a Kiwi voice – complete with Kiwi accent and the ability to accurately pronounce Māori place names. Google says it partnered with the Māori Language Commission to ensure the voice, which starts rolling out today, uses correct pronunciation.

AppWrap June 2026

29.06 Rocket Lab is buying satellite operator Iridium in a US$8b deal in a move designed to create a fully integrated space powerhouse and take on SpaceX with its Starlink service. The move takes Rocket Lab towards becoming a satellite comms and services company as well as a launch provider and manufacturer. Rocket Lab founder Peter Beck says marrying Iridium’s infrastructure and highly sought-after spectrum with Rocket Lab’s launch and manufacturing capabilities provides capability to unlock ‘entirely new markets’.

23.06 The National Cyber Security Centre has joined other Five Eyes partners in warning government and corporate leaders that swift action is required to remain ahead of the increased risk from AI. The agencies are warning leaders to understand and assess risk, readiness and accountability, prioritise foundational cyber security practices and controls, empower cyber leaders with authority and resources and stay actively engaged. Their warning includes practical actions which while not new are now deemed ‘urgent’ by the agencies including reducing attack surfaces, accelerating patching and limiting who can access critical systems.

23.06 The Tech Users Association of NZ is calling for urgent, coordinated investment in home-grown digital capability, including mandating tech upskilling in the core curriculum – alongside reading and mathematics – incentivising home grown capability and digital apprenticeships and encouraging diverse pathways. The industry body’s Education to Employment policy statement also calls for government-backed financial incentives to lower the barrier to entry for SMEs to improve their digital skills and cyber security defences.

22.06 Kiwi customer service chatbot maker Ambit AI has been placed in liquidation, with Grant Thornton appointed as liquidators. The company defaulted on a Callaghan Innovation load. ChatGPT has been blamed.

19.06 Business agents are big tech’s next battleground, with companies pouring billions of dollars into agents – with Meta among those placing big bets. But University of Auckland teaching fellow Guy Bate warns in The Conversation that convenience for businesses will come with a tradeoff: The more useful an agent becomes, the more influence it gains over the interaction itself.

18.06 AI world-model developer Odyssey, cofounded by Kiwi Jeff Hawke, has secured US$310 million in Series B funding at a US$1.45 billion valuation. The round was led by Natural Capital, with investors including Amazon, AMD Ventures and Google Ventures, Crunchbase reports. The startup, which is building models that understand the physical world, has now raised US$337m in funding.

17.06 NZ Police’s high-tech crime grew is now using Whisper AI in investigations after an earlier genAI trial was abandoned after significant misuse, only to be restarted again when officers used unapproved AI models, RNZ reports.

18.06 The Immigration Minister has slammed her ministry accusing officials of deliberately withholding information about the failed Biometric Capability Upgrade upgrade and using ‘creative accounting’ to avoid scrutiny. The Public Service Commissioner is to investigate ‘integrity concerns’ highlighted in a damning review of the project which has been written off at a cost of more than $30m, RNZ reports.

17.06 Dawn Aerospace has closed a US$25m (NZ$42.8m) series B capital raise to accelerate the global expansion of its reusable Aurora UAV spaceplane. The company says the funding will directly finance its global rollout, scaling commercial and operational teams in the US and Europe. The raise, backed by investors including Mana Ventures, Icehouse Ventures, and individual investors including Tim Ferriss, gives the company a $195m post-money valuation.

17.06 A new Microsoft Teams feature enabling Teams to detect activity on a user’s device even when they are not actively using Teams has raised privacy concerns. Auckland University lecturer Alex Baird warns companies that the Privacy Act is clear on being thoughtful about why data is collected and using it only for that purpose. If used for checking teammates know where you are, that’s great he told RNZ. Collecting data for performance tracking however would be ‘a very different thing’.

16.06 Anthropic has disabled its new Claude Fable 5 and Mythos 5 models after a US Export Control order. Forbes reports the US Commerce Department mandated the suspension of access for all foreign nationals citing security and export control powers. The move followed reports of a jailbreak bypassing safety guardrails.

12.06 SpaceX has made the biggest stock market debut in history, making Elon Musk the world’s first trillionaire. Early trading saw share prices jump from the opening $150 a share by a double digit percentage, sending the company’s valuation above US$2tn, the Guardian reports.

10.07 The NZ government is contributing up to $51m to an Early Adoption Accelerator to roll out emission reduction farm technologies. The government will match dollar-for-dollar every commercial dollar invested through AgriZeroNZ to help scale up practical on-farm innovation. AgriZeroNZ will administer the funds and says it is seeking expressions of interest from farming businesses.

09.07 Scott Technology has secured $12 million in contracts across Europe and North America for its automation offerings. The company says the deals come as the automation of global food production accelerates.

08.07 Kiwi ‘localscaler’ data storage company Exaba has secured almost $12m in seed funding to develop sovereign hosted cloud storage, the NZHerald reports [paywalled].

02.06 Auckland startup DataMasque, which builds data de-identification and masking tools, has raised $7m in a Series A round. The company’s premise is simple: Large enterprises want to leverage sensitive data, but feeding it into AI systems risks catastrophic breaches and regulatory exposure. The platform enables organisations to use their sensitive data for AI innovation without it leaving their own infrastructure, DataMasque says.

02.06 NZTA is pausing use of billboard cameras to detect WoF fraud, despite a trial proving successful. RNZ reports while the use of other organisations’ camera and automated number plate recognition technology resulted in ‘usable and valuable evidence for investigations’ the agency is not rolling out more of the surveillance because it can’t afford to.Use of the vGrid surveillance platform ended in mid-2025.

02.06 Inland Revenue’s myIR website has been overwhelmed by a surge in people trying to check their tax review online. Delays with two-step verification – with some codes arriving too late to be used – left users frustrated, the NZHerald reports.

02.06 Wellington’s deputy mayor Ben McNulty has slammed a $600,000 spend on a website for the capital’s new library, labelling it an ‘atrocious amount of money’. RNZ reports the cost of designing and building the site was $595,801, with a $72,000/year bill for hosting and maintenance.

02.06 Florida has become the first US state to sue OpenAI, over the design and safety of its ChatGPT chatbot. The state is suing both OpenAI and CEO Sam Altman, alleging they know ChatGPT is not safe, especially for minors, CNN reports.

AppWrap May 2026

28.05 Today’s budget includes more than $450m for digital health. The funding includes $153.6m over four years for Health NZ to expand national cybersecurity for health systems, and $300m to deliver the first three years of the Health Digital Investment Plan, upgrading core IT platforms, replacing aging devices and modernising radiology systems, eHealthNews reports.

28.05 NZQA has received $31m for technology upgrades, including work on machine learning for marking, in today’s Budget. RNZ reports funding has also be reprioritised for the Te Rito IT project – a cloud-based national system to connect and share student data.

28.05 Kiwibank has rolled out open banking for both individual and business customers across all digital channels. The bank says it is the first to do so, with customers now able to access open-banking enabled payments and data sharing directly through internet banking and the Kiwibank app.

27.05 The government has released new guidance to regulators on how to utilise AI to raise productivity, saying the technology can enable regulators to do more, faster. Regulation Minister David Seymour says the guidance shows regulators how to utilise AI in lower risk areas. It comes a week after the government announced plans to slash around 8,700 public service jobs and use AI to help fill the gaps.

18.05 Gentrack has acquired Wellington energy tech startup Factor for $24m. The deal, which includes a potential $10m earn-out, will see the AI-powered pricing intelligence embedded into the g2 platform to create an end-to-end retail operations platform, Gentrack says.

17.05 EY has withdrawn a study on cyber threats and fraud in loyalty rewards programs after the report was found to be ‘stuffed’ with fake citations and inaccurate claims. GPTzero researchers found the 44-page document was a ‘collage of vibe citations, misattributions, fake statistics and AI-written text’.

15.05 Dawn Aerospace, the University of Canterbury and the University of Auckland have been awarded a total of $1.48 million in the first round of the Kiwi Space Activator pilot program, which aims to move ‘more novel’ space tech from the lab to the skies. Dawn’s project will see it building and flying a small satellite, space minister Chris Penk says.

14.05 A group of academics has slammed the government’s leadership on AI, calling it lacklustre and ignoring anything that doesn’t include the words productivity or efficiency. The trio, writing on RNZ, say the latest missed opportunity was the decision not to send an observer to this year’s Responsible AI in the Military Domain summit.

13.05 The parent company of the Canvas educational tool involved in a major global hack last week has struck a deal with the hackers to secure stolen student and school data, Reuters reports. All data was returned to the company, it says, and digital confirmation of data destruction along with a promise no Instructure customers will be extorted were received Instructure says.

12.05 The upcoming Medical Products Bill will provide a modern regulatory framework for software used in healthcare, targeting therapeutic applications such as diagnosis, treatment guidance or disease monitoring, rather than administrative tools, eHealthNews reports.

12.05 Anti-money laundering reform bills have passed their final readings in Parliament with the government promising faster, less duplicative AML requirements once the bills receive Royal Assent in the next couple of days, InsideGovernment reports.

12.05 Xero CEO Sukhinder Singh Cassidy has apologised to customers after the accounting platform was hit with five days of outages. The outages were caused by Xero’s own systems and integrations with third-party platforms, SmartCompany reports.

10.05 The government has asked for 10 ‘no-cost, low-effort’ options to protect undersea internet and power cables amid concerns, with eight of the initiatives already completed or underway, RNZ reports. Among the 10 were an exercise simulating a cable break, a biannual threat assessment, and setting up a national surveillance warning capability. The moves follow sabotage and accidental damage of cables in Europe and Asia.

07.05 Rocket Lab has won a US$30 million contract with US defence tech company Anduril Industries. The deal will see three hypersonic test flights using Rocket Lab’s Haste launch vehicle to advance the US Department of War’s scaled hypersonics that deliver Mach 5 and beyond capabilities for future defence missions, Rocket Lab says.

06.05 Kiwi universities are among those caught in a worldwide cyber security attack after they Canvas learning management system, developed by US company Instructure, was subjected to a hack. The NZHerald reports Victoria University of Wellington, Auckland University of Technology and University of Auckland are among those using Canvas in New Zealand. Instructure says it doesn’t believe birthdates, passwords, government identifiers or financial information have been impacted. Names, locations of study, email addresses and messages between users are however believed to have been compromised.

04.05 Kiwi utility software developer Gentrack is acquiring Dubai Technology Partners in a US$10m deal. The company says DTP will add a portfolio of highly complementary AI-enable products which will integrate into Veovo’s Intelligent Airport Platform.

01.05 Trade compliance platform GingerControl has raised US$2.1m in seed funding. Backed VC says more than 90 companies are already using GingerControl to simplify workflows. The company was founded by Chen Cui and Sean Yu, who both grew up in West Auckland.

01.05 A ‘bug’ in a technology partner’s software saw widespread outages across One NZ and 2degree’s networks. Internet and calls were unavailable for many customers. RNZ reports that One NZ took responsibility for the issue.

AppWrap April 2026

28.04 Halter has launched a direct-to-satellite technology enabling cattle farmers to manage stock without the long range radio towers previously required. The company estimates the capability will expand access to Kiwi beef farms by as much as 20 percent, while also enabling expansion into more remote markets globally, including South America and parts of Africa.

23.04 A Public Service Commission performance improvement review of NZ police says New Zealand’s 111 platform ‘presents a fundamental risk to emergency response’ with police lacking end-to-end control over the emergency call process, limiting their ability to modernise, integrate and manage the system. RNZ reports the PIR notes a modern, integrated platform is needed, along with better tools to counter violent crime and ensure officer safety, with the report recommending continuation of an initiative to adopt body-worn cameras.

23.04 The NZ Government has launched a national Survey of Business Operations, which will provide a ‘comprehensive, up-to-date picture of how New Zealand businesses use AI and respond to economic and tech changes’. Insights from the survey, which builds on existing business data gathered by Stats NZ, will shape government policy. Around 20,000 businesses with six or more employees will be surveyed through May and June in what the government says will be one of the largest and most detailed business surveys undertaken in NZ. Invitations will be sent to ‘selected’ businesses in early May.

23.04 An Otago University expert says New Zealand needs a Reserve Bank-backed central bank digital currency (CBDC) in order to ensure it retains monetary sovereignty. Dr Murat Ungor says for the first time in history private companies and foreign governments can offer digital currencies that compete directly with the national currency, and without monetary sovereignty the country could be more vulnerable to economic shocks, reports RNZ.

23.04 Rocket Lab has successfully deployed its 87th launch, to deploy eight satellites for the Japan Aerospace Exploration Agency’s Innovative Satellite Technology Demonstration program providing opportunities for Japanese universities, researchers and companies to carry out tech demos in space. The company says the launch is its eighth for 2026.

21.04 Microsoft CEO and chairman Satya Nadella’s flying visit to NZ has been accompanied by an announcement that the compny will double its existing AI and digital skilling commitment to NZ, ‘opening access for a further 200,000 people to skilling’ by the end of 2028.

20.04 Kiwi shoe company Allbirds has announced its selling its footwear business to American Exchange Group for $39 million, and rebranding as NewBird AI, leasing GPUs. The company is now describing itself as a ‘fully integrated GPU-as-a-service and AI-native cloud solutions provider in what Forbes says is ‘the clearest picture you will get of where the actual AI bubble lives’. The company surged 600% in a single session on the back of the news.

20.04 Inland Revenue is warning 355,000 crypto-asset users in New Zealand that if they’re making money from those assets they need to think about their tax obligations. It says those crypto users have undertaken around 57 million transactions with a value of $36 billion.

16.04 Kiwi founded edtech company Storypark has acquired Australian childcare software provider Xap for an undisclosed sum. Storypark says the deal nearly doubles the size of the combined business and is a meaningful milestone in its international growth. Storypark was acquired by Potentia Capital in 2024.

15.04 Scott Technology’s half year results show EBITDA of $13.0 million up seven percent on the prior period, on revenue of $128m. The company says it expects further uplift in H2. New contract wins included a meat processor in Australia and automated guided vehicle contracts with a US aerospace manufacturer and a global leader in wine and spirits.

15.04 Travel giant Booking.com has notified an unknown number of customers about a data breach which has seen hackers steal customer data. BBC reports some customers have contacted it saying they have already started receiving suspicious messages. Booking.com has declined to say how many people are affected or in what regions.

14.04 Eight primary health organisations have joined forces in a joint procurement process for a shared, AI-capable tech platform for primary health organisations. The procurement covers claims and payments, provider portal, case management and referrals, eHealthNews reports.

13.04 Health NZ says it has saved $21.4m in one off savings from not having to upgrade platforms and ongoing savings from lower hosting and support costs, reduced duplication and improved productivity as it moves to cut hundreds of old websites. RNZ reports the agency inherited 344 websites about specific conditions or places such as the sites of the 20 DHBs. Many were no longer fit for purpose or did not meet government standards and posed technical and security risks.

13.04 New Plymouth District Court has issued a RFP for an enterprise-grade digital redaction solution capable of accurate and permanent redaction of sensitive information across a range of documents. The GETs document says implementation will begin as a service targeting high-volume or high-risk use cases.

09.04 The government says it has no existing plans to use Palantir’s emerging technologies, despite meeting with the company in February. RNZ reports Defence Minister Judith Collins met with Palantir’s international president for an information discussion.

07.04 MYOB has signed a five-year ‘strategic partnership’ with Microsoft to jointly fund, build and scale AI across its business management solutions to accelerate SME’s use of AI in day-to-day workflows. MYOB says the collaboration is focused on delivering practical, AI-powered tools, with Microsoft providing dedicated engineering support to work alongside MYOB’s teams to co-design and build the solutions. First up will be ‘AI teammates’ to reduce admin load.

03.04 Artemis II astronauts experienced Microsoft Outlook failures shortly after launch, with Mission Control called in to remotely troubleshoot the issue. Commander Reid Wiseman reported that two instances of Outlook were running simultaneously on his Surface Pro, leaving both unresponsive, Mashable reports.

02.04 Inland Revenue says 300 myIR accounts which did not have two-step verification have been accessed following a significant increase in malicious log-on attempts. IR says two-factor authentication prevented access to another 900 accounts which are now being monitored by IR, with the 300 compromised accounts closed and IR contacting affected customers.

02.04 The government is reallocating $122m of science, innovation and tech spend to focus more investment on emerging and advanced technologies, such as robotics, quantum technology and genomics. RNZ reports the funding – about 15 percent of the total $839m available – will be allocated to support four ‘pillars’ of primary industry and bioeconomy, technology for prosperity, environmental sustainability, and healthy people and a thriving society.

01.04 Datacom has acquired T4’s Auckland data centre in a move that gives Datacom five sovereign data centres in New Zealand and a second Auckland facility. The company did not disclose how much it paid in the deal, but says the acquisition– and planned investment in the site – means it has committed more than $200m to building out local data centre capability.

01.04 SpaceX has filed confidentially for an IPO according to reports, which say the company is committed to debuting in June, with Elon Musk aiming to raise US$50b-$75b. The NYTimes reports SpaceX values itself at more than $1 trillion and would be one of the most valuable companies to reach the stock market.

01.04 NZ Police aren’t receiving promised government funding for technology needed to carry out new powers. RNZ says police need two new or improved tech systems – one to handle photos of people and other data generated by enhanced intelligence gathering and one to issue new infringements under a new Bill currently before parliament.

AppWrap March 2026

30.03 New Zealand’s Dexibit has been acquired by UK-listed Accesso Technology Group for $21m. Dexibit is a AI and analytics platform for the visitor attractions market. Accesso says the acquisition launches Accesso Intelligence, a new AI-powered cross-platform capability.

26.03 Health NZ has reminded staff not to use tools like ChatGPT, Claude or Gemini in their work after staff were caught using the free versions to write clinical notes. RNZ reports staff have been told using the tools could result in formal disciplinary action.

26.03 Meta and Google have lost a landmark US case, with a Los Angeles jury finding the two companies negligent for designing social media platforms that are harmful to young people. Reuters reports the jury found Meta liable for damages of US$4.2 million, with Google liable for $1.8m in the case of a US woman who sued Meta and YouTube over her childhood addiction to social media.

23.03 NZ Tech has launched a cybertech community, CyberTech New Zealand. The industry body says the group will bring together New Zealand’s cyber tech companies, leaders and advocates to strengthen the sector, promote its capabilities and achievements and help advance national policy and investment in cyber. It has launched with 22 founding member companies, including KPMG, Deloitte, Microsoft, Service Now, University of Auckland, CyberCX and CyberCure.

23.03 One NZ has completed its 2G and 3G network switch off, with both networks now fully retired. The company says by switching off the old tech and reusing radio spectrum on 4G and 5G, it can boost speeds and increase capacity.

20.03 Govt.nz app users will be able to see their digital wallet in the app by the end of the month, with the Government Credential Issuance Platform also going live this month allowing people to store and present accredited digital credentials in the app. Hospitality NZ is working to be the first accredited digital credential in the wallet, pending changes to the Sale and Supply of Alcohol Act, Digitising Government and Public Service Minister Judith Collins says.

19.03 Xero co-founder Rod Drury has been named 2026 New Zealander of the Year, with Halter’s Craig Piggot named Innovator of the Year at the Kiwibank New Zealanders of the Year Awards.

19.03 The X Money payments service, Elon Musk’s attempt to build a ‘everything app’ will enter early public access in April. Musk’s ambitions for the embedding payments into X are broader than most Western tech companies, notes PaymentsIndustryIntelligence, with Musk talking about a system that could eventually encompass savings, payments, securities and other financial activity, reducing reliance on traditional banking channels. At launch X Money is expected to offer core wallet and payment functions, including the ability to move funds within the platform.

19.03 Rocket Lab has won a US$190m contract with the United States’ Department of War for a series of 20 hypersonic test flights over four years. RNZ reports the deal is the single largest contract for the Kiwi-founded company and lifts its total order backlog to more than US$2 billion.

16.03 The Financial Markets Authority has ruled that Easy Crypto’s NZDD stablecoin, which is linked to the NZ dollar, isn’t a financial product and can be treated like cash, rather than an investment. Newsroom reports the finding means the coin can be operated without the strict disclosure standards overseen by the FMA.

13.03 A Health NZ report says the loss of digital services jobs within the organisation will increase risks to patient care and will hit rural hospitals hardest, eHealthNews reports. More than 600 roles were vacant and not being filled when the organisation announced last year that it was reducing digital and data roles from around 2000 to 1460. It is now actively recruiting for 200 vacancies and has contracted Datacom to support its help desk through to May.

11.03 Professional body CA ANZ says it will investigate the failure of an external exam delivery platform after more than 1,300 students were locked out of one exam and another 60 experienced delays of up to 40 minutes on a second exam. CA ANZ blamed a failure in an external exam platform operated by a third-party provider.

11.03 Datagrid has been granted resource consent for a planned 280MW, 78,000m2 data centre in Makarewa in Southland. The company says the landing of the Tasman Ring Network subsea cable at Oreti Beach has also been approved. Datagrid, founded by Hawaikii Cable founder Remi Galasso and Callplus founder Malcolm Dick, could be live by 2028 with the University of Otago as an anchor tenant, DatacentreDynamics reports.

11.03 US medtech giant Stryker has been hit by a major cyberattack, with an Iran-linked hacking group claiming responsibility, saying it is in retaliation for the killing of more than 170 people – mainly schoolgirls – in a strike on a school, and warning it marks the beginning of a new chapter in cyber warfare, Al Jazeera reports. The group says it has seized 50TB of Stryker data in the attack which it says has erased data from 200,000 devices.

10.03 Anthropic is opening a Sydney office as it expands its presence in Australia and New Zealand. The company says New Zealand ranks 8th globally in Claude.ai usage, relative to population, with strong demand from local business. Anthropic says it is also exploring opportunities to expand compute capacity in Australia ‘given our longstanding belief that democracies should lead in AI development’. The company is currently suing the US government over its claims that Anthropic is a ‘supply chain risk’. The row erupted after Anthropic refused to all US military to have unfettered use to its AI tools.

07.03 Bunnings will begin using facial recognition technology in two Hamilton stores from mid-April, with a nationwide rollout to follow. The remainder of the North Island will be covered in phase two, with the South Island rollout coming in phase three, with timings yet to be confirmed, Bunnings says. The company says the system will help protect staff and customers from increasing threatening incidents.

05.03 The GCSB has warned government that cyber security around some of New Zealand’s critical infrastructure is ‘barely meeting that foundational level we would expect’. RNZ reports that GCSB director-general Andrew Clark told a select committee that supply chains, including digital ones from private companies into public agencies, were increasingly a weak point and they had to make sure private ones are hardened up like public ones.

04.03 Recruitment company Younity is reporting an 80 percent jump in open IT roles year-on-year in January, continuing a trend seen in December. It says demand is being driven largely by business transformation roles such as business analysis, project management and delivery focused positions, however, demand is healthy across critical IT disciplines including software development, data engineering and analytics, cloud computing and cybersecurity.

02.03 Andrew Bridgman has been appointed establishment chief executive of the New Zealand Institute for Advanced Technology. MBIE says he will oversee the critical foundation phase, putting in place governance, operational capability and systems required to deliver on NZIAT’s mission of ensuring advanced tech delivers meaningful, measurable benefits for New Zealanders.

02.03 Syos Aerospace has won a contract to supply drones to the New Zealand Defence force. Air, land and sea drones will be delivered as part of the deal, Syos says.

01.03 Kiwi managed services company Securecom has been acquired by the New Zeaand subsidiary of Japan’s Sharp. Shap says there will be no structural or operational changes, for the Auckland-headquartered operations and 24/7  integrated operations centre, which will continue under the leadership of Greg Mikkelsen. The deal provides Sharp with an IT services business as it moves from being a traditional print and copier business to ‘a more unified tech partner’, Sharp says.

AppWrap February 2026

27.02 The government has released New Zealand’s Cyber Security Strategy 2026-2030 and an accompanying action plan, providing a national framework for responding to cyber threats and strengthening cyber security practices. The strategy is focused around four objectives of understand, prevent and prepare, respond and partner, while the action plan translates the objectives into specific initiatives including strengthening critical infrastructure cyber resilience and quantum readiness.

26.02 Tauranga robotics company Syos Aerospace’s uncrewed autonomous helicopter has completed a series of fully autonomous mission trials clearing the uncrewed aerial vehicle for serial production, the company says.

26.02 Nvidia has posted blockbuster quarterly results of US$68.1 billion – up 73 percent year on year and well above analysts’ forecasts. Revenue from the data centre division, which sells the chips used to train and run AI models was up 75 percent yoy to $62.3 billion, the company says.

25.02 MediMap is seeking an urgent injunction to stop any sharing of stolen data after sensitive patient data was distributed to media outlets. The injunction being sought would prohibit anyone from accessing, using, copying, sharing or publishing any MediMap data that may have been unlawfully obtained and would seek to limit further spread of the information online, Stuff reports.

24.02 Pharmacists have implemented manual systems after medication management platform MediMap was hacked on Sunday. Records for some patients have been altered, including labelling some live patients as deceased, and changing names. Patient data for over 120,000 users was put at risk by the hack, the NZ Herald reports.

23.02 New Zealand’s Privacy Commissioner has joined other countries in signing a joint statement voicing concerns about use of AI-generated imagery, and reiterating expectations for organisations developing and using AI content generation to ensure systems are developed and used in accordance with legal frameworks, including data protection and privacy rules.

20.02 Fintech Dosh’s bid to become a bank has been turned down by the Reserve Bank, which says it does not meet the legal definition of a bank. Dosh told a Parliamentary banking inquiry follow-up that the Reserve Bank says it must make loans as well as offering other banking services to be deemed a bank – something Dosh says is a restrictive and narrow interpretation of the legislation, GoodReturns reports.

18.02 Xero is restructuring with 250 jobs on the line – including in New Zealand. The company is creating around 280 roles in Canada as part of the restructure, BusinessDesk reports [paywalled].

18.02 YouTube suffered an outage from around 1.50pm NZT, with a spokesperson for Google saying an issue with the recommendations system prevented videos appearing.

18.02 Spark has reported an 83 percent rise in net profit after tax, to $64m, for the first half of FY26. Revenue was down 1.2 percent to $1.8 billion in the interim results for the six months to December. It says use of agentic AI is reducing set up time by around 60 percent on some business products with AI now identifying customers with more complex needs so they can be escalated to the care team for faster resolution.

17.02 Mastercard has completed its first Agent Pay – agentic – transactions in New Zealand, with Mastercard’s country manager using a bot to purchase cinema tickets, then booking Queenstown accommodation. Stuff reports Mastercard plans to launch the offering fully in New Zealand within six to nine months. It has currently launched in the US and is in pilot in Australia, the UAE and Latin America.

16.02 Labour says it supports the principle of long-term investment in digital health, but wants more detail before committing to supporting the Government’s 10-year Health Digital Investment Plan. Labour health spokesperson Ayesha Verrall says she wants more detail about how the plan will invest in cybersecurity, eHealthNews reports.

16.02 An American computer scientist is heading to New Zealand’s Court of Appeal next week to test whether AI really can be an inventor. In the global test case, Stephen Thaler is challenging the Patent Office’s declining of an application for a patent for a new type of food container he says was named by an AI system, RNZ reports. The Patent Office and High Court say an inventor has to be human.

16.02 The Department of Corrections has warned staff about use of AI tools outside approved use, after some staff were found using it to draft formal reports. RNZ reports Corrections’ policy for Microsoft Copilot – the only AI used by the agency – is that Chat must not be used under any circumstances for reports or assessments containing personal information, but in a ‘small number of incidents’ inappropriate use has occurred.

13.02 Kiwi Chris Liddell has been appointed to the Anthropic board of directors. CNBC reports the appointment, which comes as Anthropic announces it closed a US$30 billion funding round at a US$380 billion post-money valuation, could help the company foster some goodwill with the Trump administration which has accused Anthropic of supporting ‘woke AI’. Liddell was deputy White House chief of staff during Trump’s first term.

11.02 Christchurch start-up Contented AI, which turns meeting notes into documents, has raised $4.1m in a seed funding round. The company says it will use the funding to scale into Australia and the UK, triple its team, invest in core technology and build out new integrations and templates. The funding round was led by Altered Capital, with backing from K1W1, Icehouse Ventures, Aspire NZ Seed Fund and others.

11.02 Wellington medtech Wellumio has raised $7.28 million in a pre-Series A funding round. The company is developing a portal AI-enhanced brain scan technology designed to rapidly detect acute stroke and unlock treatment within the ‘golden hour’, Voice of Healthcare reports. The funding will be used to build the team and accelerate clinical development.

09.02 New Zealand is adopting 57 digital technology international standards as part of a trans-Tasman standards agreement. The agreement aims to align standards and adopt trusted international rules across areas including AI, data management and cybersecurity. Commerce and Consumer Affairs Minister Scott Simpson says the agreement will also strengthen digital trade, and reduce fees and red tape. The national standards bodies on both sides of the Tasman will also support 33 additional joint A/NZ standards projects to progress in fields including telecommunications, while 24 standards across areas including building and construction and consumer protection will be ‘re-aligned’.

09.02 Computer simulations, based on climate models, are being used to predict future ocean temperatures and currents – and future marine heatwaves and ocean-driven weather patterns – in an $8.9m project examining how offshore ocean changes are driving extreme weather in New Zealand and impacting coastal waters. The five-year project will see self-driven ocean gliders mapping the ‘heatscape’ along New Zealand’s coastline University of Auckland says.

09.02 Early-stage investment in start-up businesses attracted 8.6 percent more capital, with nearly twice as many new businesses receiving investment in last year, according to Angel Association. RNZ reports deal activity rebounded with a 34 percent increase in the number of deals completed, to 167, but the capital increase was a more conservative 2.7 percent, to $13.9m.

04.02 The Warehouse Group is cutting 270 head office roles and upping its ‘co-sourcing’ with Tata Consultancy Services as part of a push for a ‘leaner operating structure’. TCS will support delivery of corporate and admin functions, including parts of technology, accounting, call centres and payroll, TWG says. Last year the company announced it was using TCS to simplify its tech stack and lower costs, saying the partnership would reduce licensing and managed services costs by up to $40m over five years and free tech teams to focus on delivering more value for customers, communities and shareholders.

03.02 Kiwi software quality consultancy Assurity Consulting has been acquired by global technology services firm Aspire Systems. Assurity says the deal will provide global scale and deep technical capability, unlocking a pipeline of AI tools for New Zealand and Australian clients.

03.02 A new ‘digital medical assistant’, aka chatbot, to provide pre-and post-surgical advice is being rolled out to some New Zealand and US clinics. The AI agent, developed by Fios Health and operating via SMS, is customised to each surgeon’s protocols and proactively sends information and answers patient questions. Early trials showed some patients felt more comfortable directing certain questions to an AI assistant rather than their surgeon, Fios says.

03.02 Xero says more than two million subscribers are using its full AI features, with more than 300,000 using its newer GenAI features. In a market update today the company claimed customers are saving around 22 hours a month using bank feeds and automated actions, with more than 12 percent using AI Insights.

03.02 Kiwi AI startup Teacher’s Buddy has raised $2.3m in trans-Tasman seed funding. The offering aims to reduce teacher workloads, helping with marking and student report writing and producing customised, differentiated curriculum-aligned teaching and assessment materials  The company says the funding was led by Auckland’s Soul Capital and Australia’s Giant Leap.

03.02 2degrees has completed the shutdown of its 3G services with finals shutdown completed last night. The telco says the shutdown enables it to focus on strengthening and expanding its 4G and 5G networks which already carry the vast majority of mobile traffic, while also looking to satellite.

AppWrap January 2026

31.01 Spectral Defence has been crowned the national winner of the ActInSpace New Zealand 2026 hackathon and will represent New Zealand at the international ActInSpace finals in France in April. The event sees teams tackle space-related challenges, applying satellite data, earth observation and space-enabled technologies to problems spanning sustainability, infrastructure, resilience and ‘everyday life applications’, SpaceBase, who delivered the NZ event, says.

30.01 The NZ government has launched its Public Service AI Work Program designed to accelerate the safe and responsible adoption of AI across government agencies. The two-year ‘action plan’ is designed to connect agencies’ efforts with the resources, guidance and support needed to accelerate AI adoption, while modelling best practice, Digital.govt.nz says. The program includes an AI marketplace, an AI hub with registries and tools, a dedicated AI Innovation and Accelerator Lab and a public service AI Sandbox.

30.01 Thirty-eight percent of Kiwis received unwanted digital communication in the last 12 months, with 14 percent reporting the experience negatively impacted their life, Netsafe reports. Ten percent admitted having sent or shared at least one form of unwanted communication themselves in the past year.

29.01 A system error with the Ministry of Social Development’s IT system resulted in around 200 pensioners who get overseas pensions receiving incorrect NZ Super payments. RNZ reports the ministry is working ‘urgently’ to fix the fault in the IT system which updates overseas pension rates.

29.01 Hospital administration systems across the top half of the North Island shut down for 12 hours in a major IT failure affecting clinical and operational systems. All emergency department, laboratory and inpatient systems were affected with clinicians resorting to paper-based systems, whiteboards and phones, Stuff reports.

27.01 Nema is warning people about AI images circulating on TikTok claiming to capture the fallout of the Mt Maunganui slip. The scenes depict exaggerated scenes of destruction including a raging waterfall and emergency workers digging through wreckage. A Victoria University senior lecturer says he believes it is the first time AI images of a New Zealand disaster have circulated online, RNZ reports.

26.01 Client data has been breached in a cyberattack on Napier law firm Langley Twigg Law. The company says security monitoring software alerted to unauthorised activity on the network on 11 January, after the network was targeted by ‘a sophisticated malicious attack using a new strain of virus’ not recognised by antivirus programs at the time. Client data has been copied from the file server, the company says.

27.01 Airwallex boss Jack Zhang says the fintech is at least two years away from a public listing, despite regular references to an IPO in 2026. Zhang’s comments, reported in StartupDaily, follow news last week that Austrac has ordered an audit of the company over AML/CTF concerns.

26.01 A digital twin simulating New Zealand’s entire population, has been used to study resilience to measles. eHealthnews reports the digital twin creates ‘virtual kiwis’ built from aggregated census and government data, enabling researchers to model public health scenarios to inform public policy decision and emergency planning, without tracking real people.

23.01 Manage My Health has warned that secondary actors may be impersonating the company and sending spam or phishing emails in the wake of the high profile hack of the online patient portal. The company says it has been granted an interim injunction from the High Court to prevent access, dissemination or publication of the impacted data by any third parties and says it is monitoring data leak websites and ready to issue takedown notices.

23.01 TikTok has finalised agreements with backers including Oracle, Silver Lake and Emirati company MGX to establish a US joint venture. Each of the three backers will hold a 15 percent stake in the company. ByteDance keeps a 19.9 percent share. The BBC reports the content recommendation algorithm has been licensed to Oracle – headed by Trump ally Larry Ellison – which already oversees US user data under a previous arrangement set up over security concerns. The deal will enable TikTok to continue operating in the US, but is likely to continue to be scrutinised, with some Democrats voicing concerns about the ties between Trump and TikTok’s new investor group could limit what gets shared on the platform.

22.01 Australia’s financial intelligence unit, Austrac has ordered an external auditor be appointed to assess whether fintech – and unicorn – Airwallex is complying with anti-money laundering and counter terrorism financing. Austrac says it has ‘concerns’ about potential non-compliance including that Airwallex’s transaction monitoring program has not been ‘attuned to the full range of risks it faces’ and the company hasn’t demonstrated an acceptable understanding of who its customers are and what reporting may be required. The auditor must report findings within 180 days of appointment.

22.01 Hamilton’s Cloudland has acquired professional services tech provider CommArc for an undisclosed sum, in its fourth acquisition in as many years.

20.01 Kiwi legal tech startup Ivo has raised US$55m in a Series B funding round led by existing investor Blackbird. The company’s platform helps in-house legal teams review contracts. Ivo says customers include Uber, Shopify, Canva, Atlassian, Reddit and Pinterest, and the capital will support product development and scaling the company.

15.01 Kiwi email signature provider Crossware has bought Germany’s largest email signature provider, CI Solutions, in a multimillion-dollar deal. Crossware says the deal significantly scales its presence in the European union and establishes it as one of the leading email signature providers globally, processing more than five million emails every day.

13.01 Advertising is hitting the AI chatbots with ads starting to show up in Google’s ‘AI Mode’ in what the Washington Post says is likely to be just the beginning of more trial-and-error attempts this year. Google has been pushing a new type of ad in AI Mode to advertisers, OpenAI has also been looking at introducing advertising in ChatGPT and Perplexity attempted ads but pulled back last year – but has left the doors open to try again.

11.01 Around 70 percent of those impacted by the ManageMyHealth breach are based in Northland. Ransomware group Kazu has demanded US$60,000 after stealing hundreds of thousands of medical files. RNZ reports around 120,000 patients have had data stolen, with 80,000 of those based in Northland.

01.01 ManageMyHealth has been hacked, with ‘six to seven per cent’ of its approximately 1.8 million registered users potentially affected. The company says it has begun to identify users affected and will start notifying them within the next 48 hours.

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The prediction reflects one of the less discussed consequences of the generative AI boom. While early conversations focused on productivity gains, code generation speeds and developer efficiency, software engineering leaders (and indeed, all IT leaders) are now facing a new challenge: Controlling the cost of AI itself.

“Token discipline will not emerge through developer choice alone.”

At the same time, vendors are increasingly moving away from traditional seat-based licensing models towards consumption-based pricing, where organisations pay for the tokens consumed by AI models. As AI deployments scale, token consumption is emerging as a growing cost consideration across the industry. The combination of higher usage and metered billing is creating a cost trajectory that Gartner believes many organisations are underestimating.

On the coding front, Gartner says 40 percent of software engineering leaders are reporting that more than half of their teams are using AI tools to augment software development processes. As adoption grows, token consumption – the units increasingly used to measure and bill AI model usage – is rising rapidly.

Early signs of the cost impact are already emerging with Gartner Peer Insights data showing 23 percent of software engineering leaders are reporting costs of US$200 to US$500 per developer per month in token costs for AI coding agents such as Claude Code, Cursor and OpenAI Codex. For five percent of organisations, that figure has already soared to more than US$2,000 per developer per month.

“Organisations are rapidly moving from experimentation to scaled deployment of AI coding agents, but many are underestimating the financial impact of rising token consumption,” Nitish Tyagi, Gartner senior principal advisor, says.

““AI coding costs will continue to rise as infrastructure investment and profitability challenges push model pricing higher,” Tyagi says. “At the same time, as more developers adopt AI tools, light users are expected to rapidly become mainstream users as familiarity and reliance increase, driving further growth in token consumption and overall spend.”

The concern isn’t simply the price of large language models. Gartner argues that three common behaviours are driving much of the overspending: Giving AI agents too much autonomy, providing excessive amounts of context, and failing to establish feedback mechanisms to identify and prevent wasteful usage patterns.

“Token discipline will not emerge through developer choice alone,” Tyagi says, noting that developers will naturally optimise for speed and convenience, rather than token efficiency. Instead, organisations should treat token consumption as a governed part of their engineering operating model, the analyst company says in its How to Optimise Token Consumption for AI Coding Agents report.

That recommendation may be particularly relevant as organisations race to adopt increasingly capable AI coding agents. Unlike traditional coding assistants that suggest code snippets or provide developer support, agentic platforms can take on broader development tasks autonomously. Gartner points to increases of 100x over coding assistants experienced by software engineering leaders.  

Gartner says organisations need to establish clear rules around when AI agents should be used and how much autonomy they should be granted.

The report recommends categorising software development activities into three tiers: Developer-only work for sensitive, operationally risky work or work not worth the token cost; AI-assisted development where humans remain in control, and fully autonomous agent-led development. AI-assisted development should be the default zone for most day-to-day engineering because it improves throughput while maintaining human oversight and avoiding some of the introducing costly agentic loops which can occur when autonomous systems repeatedly call models and tools without adequate controls, Gartner says. Those with lower software engineering maturity and limited governance frameworks are also advised to prioritise assistive AI over autonomous development.

Governance is another area Gartner says requires urgent attention.

Less than one in three engineering organisations currently has formal AI governance policies in place. Gartner says engineering leaders should assess both the maturity of their software development practices and existing AI controls before expanding the use of autonomous coding agents.

“Organisations should introduce mechanisms such as token thresholds, escalation policies and automated monitoring to manage growth. Embedding these controls into engineering workflows ensures consistency and prevents uncontrolled costs.”

The report also highlights what Gartner calls context engineering as a critical discipline for controlling costs.

Every file, document, code repository extract or tool output included in an AI prompt increases token consumption. Gartner advises development teams to treat context as both a quality input and a cost driver, requiring developers to evaluate what information is essential, what can be summarised and what can be removed altogether.

“A mature context engineering practice should teach developers how to structure context so that it is not merely comprehensive, but optimised.”

Another recommendation is to avoid defaulting to premium AI models for every task. Instead, Gartner advocates model-routing approaches where smaller, lower-cost models handle routine work, with tasks escalated to more powerful and expensive models only when complexity or risk justifies the additional spending.

“AI coding agents are most cost‑effective when work is broken into smaller tasks that can be handled by smaller models, with escalation only when complexity demands it. Model choice should be driven by task complexity, context size, application criticality, and developer maturity.”

Also recommended is better visibility into how AI coding tools are being consumed, with regular reviews of high-token-consuming workflows as part of sprint retrospectives to identify inefficiencies, refine practices and promote knowledge sharing across engineering teams.

“Most organisations still lack the maturity and frameworks to effectively measure cost versus business impact,” says Tyagi.

The report stresses that higher costs aren’t necessarily bad if they bring measurable business benefits, such as profit, reduced risk, improved growth or support strategic goals.

“The goal is to use AI coding agents efficiently but not to restrict the use of them.”

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The government-backed investment agency is promoting New Zealand as a destination for large-scale data centres and AI infrastructure, arguing the country offers a rare combination of renewable electricity, available land, grid capacity and political stability at a time when global demand for computing power is surging.

“The question is whether global investors will be persuaded that renewable power outweighs and room to expand outweigh the advantages traditionally offered by larger markets.”

The strategy is built around a simple proposition. As AI drives unprecedented demand for data centres, access to power is becoming a critical constraint. And if electricity is becoming the scarce resource, New Zealand believes it has an advantage. Earlier this year Boston Consulting Group flagged data centres as a key growth opportunity for New Zealand, proviing a $70 billion opportunity for the country.

Invest NZ describes New Zealand as ‘the secure, green solution’, highlighting that more than 88 percent of the country’s electricity generation comes from renewable sources. It says established data centre hubs are increasingly facing limits around power, land and environmental capacity, while New Zealand still has room to grow.

The pitch, launched last week, comes as global spending on Ai infrastructure reaches unprecedented levels. Microsoft, Amazon, Alphabet, Meta and Oracle collectively spent US$437 billion on capital expenditure in 2025, up 68 percent year-on-year, with spending forecast to continue rising as hyperscalers build out AI capacity.

Boston Consulting Group, which has been advising on New Zealand’s data centre opportunity, says global computing capacity is expected to more than double by 2030, with demand continuing to outstrip supply. Its research argues New Zealand has a ‘right to win’ a larger share of international investment because of its renewable energy resources, fibre connectivity and stable operating environment.

But New Zealand is entering a competitive market.

Australia has been attracting large-scale investments from AWS, Microsoft and Google for years, supported by a significantly larger domestic market and a more established cloud footprint. Those investments have largely been concentrated around Sydney and Melbourne, where providers can serve large enterprise and government customer bases.

Invest NZ is effectively arguing that, in the AI era, the equation is changing. Rather than being built solely where customers are located, some future AI infrastructure may be built where long-term electricity supply is available and affordable. It’s an argument BCG also supports. It says a growing share of workloads, particularly AI model training, are not latency-sensitive, so distance is no longer a constraint and computing capacity can increasingly be located where power and infrastructure are most competitive.

56 and counting

The country isn’t starting from scratch.

Last year a Tech New Zealand report into data centres noted there were already 56 operational data centres in the country, with another 20 planned or under construction, claiming the sector ‘directly employs over 1,000 people’. That report also painted a glowing picture of data centres in New Zealand, saying the sector underpins $93b in economic activity, with $16.5b in ICT GDP and $76.5 billion in knowledge-intensive services. And, like BCG and Invest NZ, it also pushed the sustainable power card, noting local data centres achieve on average power usage effectiveness. (PUE) of 1.3 – ‘significantly’ outperforming the global average of 1.54, and are rapidly transitioning to 100 percent renewable energy sources.

Recent years have also seen major investments from local operators including Spark, Datacom and CDC, alongside expansion by international cloud providers. Amazon Web Services has previously announced plans to invest NZ$7.5 billion in its Auckland cloud region over 15 years.

But the clearest example of the proposition Invest NZ is now selling offshore may be Datagrid’s Southland project. A subsidiary of Singapore’s BW Digital, and headed up by founder and CEO Rémi Galasso who was also the founder of the Hawaiki Cable (Callplus founder Malcolm Dick is Datagrid’s other co-founder), the company has secured approvals for a $5 billion ‘AI factory’ at Makarewa, north of Invercargill. The 78,000m² 

development will comprise six large data halls and is designed to support hyperscale AI and cloud workloads.

Galasso has described the development as having the potential to transform Invercargill into a digital destination, while the company has consistently promoted Southland’s renewable energy resources, cool climate and international connectivity as key advantages.

But the project also highlights the scale of infrastructure required to support AI ambitions. When fully operational, the facility is expected to draw up to 280MW. It’s been granted approval however, to scale up to an eye-watering 1GW capacity – twice the power consumption of the Tiwai aluminium smelter, whose future has been a key factor in New Zealand’s energy planning. Even at 280MW, the facility will be the second-largest electricity user after Tiwai and accounting for six percent of national electricity consumption. (Globally, a UN University report – which notably doesn’t include New Zealand suggesting the country’s current limited visibility in global AI infrastructure development – says by 2030, AI could be consuming three percent of the world’s electricity.

Earlier this year Datagrid secured a 15-year 140MW/year power purchase agreement with Mercury to help underpin future supply requirements.

The infrastructure challenge extends beyond electricity. Hyperscale AI facilities require extensive cooling systems, and Datagrid plans to use groundwater and on-site stormwater for thermal management at its Southland facility. As New Zealand pursues large-scale AI investment, energy, water and connectivity are all becoming part of the equation.

The company is also expected to benefit from the Tasman Ring Network, a 6,000km trans-Tasman subsea cable linking Invercargill with Sydney and Melbourne that has received approval and is intended to improve international connectivity for cloud and AI workloads.

Supporters see such projects as evidence New Zealand can compete internationally.

University of Waikato AI Institute director Albert Bifet has previously said facilities such as Datagrid provide the computing power and connectivity needed to train and run modern AI systems, noting that other regions are investing heavily in comparable infrastructure to support innovation and economic growth.

Others point to broader economic questions around who ultimately benefits from such investments.

University of Auckland researcher Angus Dowell has noted that major data centres can be physically located in one region while remaining economically integrated into global cloud and AI networks, where customers, decision-making and commercial returns are often concentrated elsewhere. “The key issue is therefore not just whether the project brings investment, but how the benefits of that investment are structured and distributed,” he said earlier this year.

For now, Invest NZ is focused on making the investment case.

At an Auckland event last week, business and energy leaders were presented with a vision for turning New Zealand into a significant destination for AI infrastructure investment. Contact Energy chief executive Mike Fuge described the opportunity as a ‘once-in-three-generations opportunity’.

The question is whether global investors will be persuaded that renewable power, available capacity and room to expand outweigh the advantages traditionally offered by larger markets.

With hundreds of billions of dollars continuing to flow into AI infrastructure globally, that is the bet New Zealand is now taking to market.

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“The program is the first major step in an ambitious program designed to strengthen connection between education and industry.”

The Industry Accelerator – Teachers to Industry Program will see educators undertake professional development and industry immersion with organisations including Adobe, Macquarie Technology Group and Omron Automation and Robotics Australia. It’s designed to give teachers hands on experience and direct exposure to current technologies, workplace practices and employer expectations, before returning those insights to the classroom.

The launch follows a successful pilot involving 34 advanced manufacturing teachers, which drove the program to progress to full implementation last week with an initial cohort of 50 digital and finance teachers beginning their initial professional development phase before beginning industry placements.

TAFE NSW says participating teachers will focus on priority skills areas and then share learnings across the wider organisation to broaden the program’s impact.

The move comes amid ongoing concern across Australia and New Zealand about the availability of digital skills.

In New Zealand, technology industry body TUANZ recently issued another call for ‘urgent, coordinated investment in home-grown digital capability’, including encouraging diverse pathways of training, expanding industry-led reskilling programs with tax credits or subsidies, and mandating technology upskilling in the core curriculum.

While employers are continuing to invest in AI, cybersecurity, automation and data-driven technologies, industry groups on both sides of the Tasman have continued to warn that demand for digital capability is outstripping supply. At the same time, employers on both sides of the Tasman have long complained that graduates often arrive with qualifications but lack exposure to the tools, platforms and technologies being deployed in business environments, with the technical skills learned in education settings often not matching those required in the real world.

In announcing the initiative, TAFE NSW said the program would help educators remain at the forefront of industry practice by providing hands-on experience with ‘leading employers across NSW like Adobe, Macquarie Technology Group and Omron’. The aim is to strengthen expertise in priority skills areas and improve the relevance of training delivered to students, ensuring it better reflects workplace expectations.

The organisation says industry partnerships will play a critical role in ensuring training reflects current workplace requirements and future workforce needs, and representatives from Microsoft, Google, SAS, Adobe, Macquarie Technology Group, Palo Alto Networks and Omron on hand for last week’s launch at the Institute of Applied Technology, Digital at TAFE NSW Meadowbank.

There is, of course, a difference between learning how modern organisations use technology and learning how tech companies would like organisations to use technology. TAFE NSW has framed the program around industry practice and workplace readiness, but it remains to be seen whether educators return with deeper insight into employer needs, vendor ecosystems or a healthy dose of both.

Fiona Watts, TAFE NSW senior manager education standards, says the program is the first major step in an ambitious program designed to strengthen the connection between education and industry while providing direct exposure to emerging technologies and workforce requirements.

Watts, who is leading the initiative, says the program is about creating genuine partnerships to help educators understand where industry is heading so they can prepare learners for careers that may not even exist today.

The new scheme forms part of a broader push by TAFE NSW to strengthen tech capabilities across its training network. Other recent initiatives include the launch of microskills programs covering AI, cybersecurity and data centres, and specialists training facilities and centres of excellence focused on emerging technologies. The Meadowbank facility, into which the Albanese and Minns Labour Governments have invested $11 million, is one on those new centres of excellence and is expected to train more than 50,000 Australians annually, upskilling and reskilling students and workers in cybersecurity, AI, big data, cloud and software.

The launch also follows the New South Wales Government’s announcement of a A$2.7 billion investment in TAFE NSW, including funding for network upgrades, classroom technology modernisation and new devices for staff and students.

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One Gartner client began with more than 600 potential AI use cases competing for investment. Unsurprisingly, Gartner’s Luke Ellery recommends companies don’t pursue everything. Instead, he recommends creating a ‘AI funding funnel’ that ranks initiatives based on business value and technical feasibility before significant budgets are committed.

“It’s a great way of helping CFOs understand AI investments.”

For CIOs facing pressure to ‘do more with AI’ the message at Gartner’s recent Data and Analytics conference in Sydney, the message was surprisingly simple: Stop launching pilots and start managing AI investments like a portfolio.

Ellery, Sydney-based Gartner VP analyst, says while organisations have been spending billions on AI, ‘you could say there is no R in ROI, only investment’. A Gartner survey showed 80-95 percent of Gartner clients saw limited financial returns from their AI investments and only 11 percent of CFOs were able to concretely measure financial returns from big AI investments.

Ellery’s assessment? Based on other Gartner surveys, he says the number one thing is picking the wrong use cases. Deploying Microsoft Copilot might help employees save time and feel happier and more productive, but that’s not financial value.

Value vs feasibility

Gartner’s funding funnel requires ideas to be vetted and prioritised across two dimensions – business value and feasibility.

Business value focuses on the outcomes executives care about – higher revenue, lower costs, reduced risk or improved service delivery. It’s an area that will vary for each organisation, Ellery notes. Time horizon is also an important factor here, he says. While last year CFOs were very focused on getting AI returns within the year, that stance has softened somewhat with the realisation achieving AI goals, and returns, will be harder than anticipated and returns will come on a longer time frame.

Feasibility, meanwhile, looks at the practical realities of implementation, including data readiness, technology requirements, skills availability, security controls and governance obligations.

The sweet spot, of course, is funding initiatives that score highly on both measures and will provide easy wins.

But Ellery notes: “Often organisations won’t have many.” All, however, is not lost. Ellery says leaders need to think about how projects work together, evaluating AI initiatives as a portfolio, rather than in isolation.

“In some scenarios it is very hard to get any of the individual projects off the ground by themselves, but if we collect a number of projects together, we can combine the cost and value and risks.

“It’s a great way of helping CFOs understand investments so we can actually create those larger returns.”

Why boring projects matter

He used customer personalisation as an example of an initiative with potentially high business value. The ability to tailor products, offers and interactions to individual customers has long been viewed as an AI holy grail, with obvious implications for revenue growth and customer retention.

The challenge, however, is that many organisations lack the foundations required to make personalisation work. Customer data may be fragmented across multiple systems. Governance controls may be immature. Data quality may be poor. Technology platforms may not be integrated.

As a result, what appears to be a high-value opportunity often scores poorly on feasibility.

By contrast, a much less glamorous project – such as automated client call summarisation – may deliver only modest business value on its own. It is unlikely to transform an organisation’s growth prospects or dramatically improve profitability, yet it may be significantly easier to implement.

More importantly, the project may capture and structure customer information essential for more advanced personalisation initiatives later.

Seen that way, the lower-value project becomes a stepping stone to something much bigger.

“We need to look at all these initiatives as a group in a broader view,” Ellery says. “The problem is that a lack of consistency prohibits us from actually achieving differentiation,” he says, arguing that organisations often need to fix underlying operational and data problems before they can use AI to create competitive advantage.

Building foundations before differentiation

Many AI projects fail not because the models are inadequate, but because organisations do not have accessible, well-governed data available for those models to use.

Technical debt presents a similar challenge. Legacy systems often store valuable information in formats that are difficult to access, integrate or analyse. Organisations may also need to invest in security, governance and compliance frameworks before deploying AI more broadly.

These investments can be difficult to sell with boards and executive teams naturally attracted to customer-facing use cases and ambitious transformation projects. Few get excited about data architecture, governance frameworks or system modernisation. Yet those investments can determine whether more ambitious AI initiatives succeed or stall.

Ellery pointed to the banking sector to illustrate that, noting years of core banking modernisation efforts as an example of organisations improving consistency across technology environments.

“That’s probably why some of the banks are more ahead in the AI race than others, in terms of realising the value of AI.”

In some cases capability-building projects lacking immediate business impact may be the highest-value investments an organisation can make.

Making the financial case

After vetting and prioritising – providing the litmus test for funding – Gartner’s funding funnel focuses on the crux of the issue – the funding. He noted there are different types of value for organisations. ‘Green money’ provides direct, measurable financial outcomes that appear in profit and loss statements, such as increased revenue or reduced budgeted costs. These are the benefits CFOs tend to care most about because the cause-and-effect relationship is clear.

‘Blue money’ by contrast, includes measures such as customer satisfaction, employee experience and Net Promoter Score. While these metrics may contribute to future financial performance, they don’t guarantee a return and can be difficult to directly link to revenue or profit with less direct correlation.

Ellery also warned against relying heavily on ‘cost avoidance’ arguments, such as delaying a system upgrade, noting that financial leaders often place less weight on savings that have never formally appeared in a budget.

“What we’re doing is putting all this information together on a slide so we can make a determination with the CFO.”

When cumulative costs are higher than the benefit – as with the earlier customer personalisation example – there’s a chance to flip the conversation and argue it as a cost leader to enable you to do other projects – or to bring it into a wider program.

Ellery noted the success of a multinational DIY and home improvement goods company. “They used a system dynamics model and did scenario simulations over three and five years to actually figure out how to order, how to do promotions with feedback loops.”

Targeting 10 percent revenue growth, they nearly got it, coming in at nine percent.

“But they also stabilised their supply chain, which unleashed about $120 million in working capital, and they also deferred the expansion of their processing facilities, which saved them about $25 million in capital costs.”

A courier company increased on-time deliveries by 25 percent, cut idle time by 20 percent and reduced fleet expansion to three percent through use of ‘a very interesting agent-based model, where they had agents represented for vehicles, drivers, customers as autonomous agents’ and micro-hubs.

And a hospital, aiming to reduce emergency department wait times by 15 percent in three, months used AI in its demand forecasting and rostering. Their wait times dropped 77 percent and – as a side benefit – they also saved $100,000 in overtime through data-driven staffing.

“If we can target the value that we’re trying to optimise, it makes it so much easier for us to build these AI systems to actually realise those outcomes and to optimise them.”

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In its first determination on tracking pixels, the Office of the Australian Information Commissioner (OAIC) has found that two health providers – Medmate Australia and Monash IVF – interfered with user privacy by using the technology to track website visitors and target them with advertising on social media platforms.

“Advanced technology used for tracking and targeted advertising in the online realm still has to be used in compliance with the Privacy Act.”

Privacy Commissioner Carly Kind’s decision establishes that the use of tracking pixels to track website visitors to health-related websites and to subsequently target them with advertising on social media platforms, amounts to a collection of sensitive information for which website providers must obtain users’ consent.

Tracking pixels are small pieces of code provided by third parties – typically platforms like Meta (with Meta Pixel) or TikTok (with its TikTok Pixel, integrated into TikTok Ads Manager, and used either natively or via TikTok partners including Shopify). They’re embedded into webistes to collect data about user activity. When a visitor loads a page, the pixel transmits information about that interaction back to the platform, enabling functions such as campaign measurement, audience profiling and ad targeting. Kind notes tracking pixels can be configured for a variety of purposes, tracking webpages users visit, clicks, what is put into carts and, in some cases, information entered into forms. Unlike cookies, they can’t easily be cleared or blocked entirely.

While such tracking is widely used across sectors, the regulator’s determinations focused on health-related websites, where browsing behaviour can reveal – or allow inferences about – an individual’s health status. This is classified as sensitive information under Australia’s Privacy Act.

The Commissioner found that using pixels in this context to track visitors and retarget them with ads amounted to collecting sensitive information without consent, in breach of privacy obligations.

“Today’s decision establishes that the advanced technology used for tracking and targeted advertising in the online realm still has to be used in compliance with the Privacy Act,” Kind says.

The ruling extends beyond just health, with Kind noting that website providers using tracking pixels to collect any sensitive information, such as data on political opinions, race or ethnicity, as well as health, must obtain consent.

Widespread use, limited disclosure

Alongside the determinations, the OAIC released findings into a ‘scan’ of 50 health service provider websites, highlighting how common the use of tracking pixels has become – and how poorly it is disclosed.

The regulator found that more than half of the sites examined used a third-party tracking pixel, yet 77 percent of those did not mention the technology in their privacy policies.

Overall, 96 percent of the websites used some form of tracking technology.

The OAIC says the results point to a broader issue across the digital ecosystem, where tracking technologies are embedded into websites but remain largely invisible to users.

A deeper dive into 12 websites found 50 percent used more than one tracking pixel provided by social media platforms, with all using Meta’s pixel.

Among the information being sent to the social media platforms was the full URL containing information about the page visited, website searches, button clicks, and device information.

Instances were form fields, including hashed name, address and phone numbers were shared with social media platforms were also observed, enabling matching of information to individuals and their profile, even when they are not logged in.

Despite that, the majority did not disclose use of the pixels or that information was being shared with social media platforms.

In the case of Medmate, a telehealth provider, the company was using both Meta and TikTok pixels and fed full URLs to TikTok which revealed information on health conditions, including urinary tract infections, bacterial vaginosis and the need for emergency contraception, and medication sought by individuals.

The company, which stopped using all tracking pixels on its site as of December 2025, paid for online advertising campaigns, primarily on Facebook, Instagram and TikTok, using custom audience lists to retarget individuals based on their website interactions.

The company had Meta Pixel’s Advanced Matching feature enabled from October 2021 to December 2024, enabling collection of more granular information about individuals.

“For periods in which the Advanced Matching feature was not in use, Medmate could retarget ads to those individuals who visited the website on the pixel provider platforms,” Kind says. “I am therefore satisfied that Medmate was able to distinguish individuals from others in a way that affected their rights or interests by using tracking pixels to target and treat individuals on an individualised basis, even without their identity being known.

Monash IVF meanwhile used five active tracking pixels, including Meta, Google Ads and google Analytics in December 2024. It also used two others, including Pinterest, at different times.

It used Meta Pixel for advertising campaigns relating to egg donor and freezing, endometriosis, fertility and sperm donation, among others and created custom audience lists using other sources of customer information, uploading the lists to Meta Pixel Provider Dashboard to retarget advertising and ‘layer, build and further refine individuals’ they wanted to retarget.

Broader compliance signals

The determinations are the first of their kind from the OAIC on tracking pixels and signal increasing regulatory attention on digital tracking and targeted advertising practises.

Kind has emphasised that existing privacy laws apply to modern tracking technologies, regardless of how they are implemented or which third-party platforms are involved.

The OAIC’s guidance on tracking pixels notes that while the Privacy Act does not prohibit the use of the technology, organisations deploying third-party tracking pixels on their websites should conduct appropriate due diligence to ensure they are used in a way that is compliant with the Privacy Act and Australian Privacy Principles, and should ensure sensitive data isn’t disclosed to third-party platforms and is only collected with consent.

“Organisations must ensure their privacy policies and notifications contain clear and transparent information about the use of third-party tracking pixels,” the guidance says.

It says organisations should adopt a data minimisation approach and conduct regular, ongoing reviews of tracking technologies deployed on their website to ensure use remains appropriate and complies with privacy obligations.

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The IBM Institute for Business Value’s Calculus of AI Sovereignty study, which surveyed 1,000 senior executives responsible for AI, data, tech or related enterprise capabilities globally, found that 71 percent of them already expressed concern that switching AI vendors or models would be difficult. At the same time, the report shows a gap in understanding of what exactly that dependency looks like, with 91 percent of respondents admitting they didn’t fully understand their dependencies across vendors, models and infrastructure.

“Sovereignty is not an on/off switch. It’s more like a set of dials, each tuned to a specific business impact.”

Meanwhile, 72 percent of respondents said they’d be willing to pay a 20 percent cost increase to maintain multiple AI vendors for strategic flexibility.

IBM says its research, which was carried out in collaboration with Oxford Economics, shows the value of that flexibility and leverage. Organisations in the study who had the greatest control across their AI stack protected 55 percent more operating profit from AI-driven disruption than those with less control, the report says.

The study also highlights the operational implications of those dependencies as AI moves into core business functions. Executives reported an average of six AI-related disruptions over the past two years, largely linked to vendor services. In addition, 81 percent said a seven-day outage at a primary AI provider would cause severe or critical disruption to operations, and effectively halt operations.

“In AI, dependency extends into the model layer and the services around it, introducing new forms of volatility,” the report says. Models can change behaviour without formal release cycles and service terms and safety controls can be updated with little notice. Respondents cited unexpected changes across the AI ecosystem, from price increases and usage restrictions, to model deprecations, changes to privacy and data handling terms, performance degradation and new geographic access limitations aka the Anthropic shutdown of Fable and Mythos.

Control tightens and regulators respond

The report comes hard on the heels of warnings from Forrester that changes to SAP’s API policies, which came into force earlier this month, will restrict third-party AI agents, large-scale data extraction to non-SAP environments and workarounds through proxies, gateways, customer code or impersonation.

The changes are being enforced through platform updates and supported by SAP’s own AI and data services, which define the approved pathways for access.

The restrictions affect how organisations connect external AI systems, including third-party models and agents, to SAP data and processes. The vendor made its agentic Joule Studio 2.0 free – at least until December 31 2026, or in Forrester’s words ‘free to adopt, priced to entrench’. Agent runtime is free as is A2A interoperability – with no cap.

“This is the most aggressive commercial move SAP has made in a decade,” the Forrester analysts – Faram Medhora, Mark Moccia and Stephanie Balaouras – say.

“The 2027 pricing for Agent Gateway throughput at scale, A2A consumption, BDC egress, and Joule Studio post-promotion remains undisclosed. Most customer 2026 budgets do not model this cliff. The free-through-year-end window is SAP’s path to getting the customer on the highway, knowing that the customer will inevitably pass through a metered tollbooth down the road in 2027.”

Forrester has gone so far as to say SAP are attempting to become the gatekeeper of enterprise AI, urging CIOs to ‘push back’.

At the same time, regulators are examining whether similar dynamics are emerging across other enterprise software ecosystems.

In the United Kingdom, the Competition and Markets Authority has opened an investigation into Microsoft’s business software ecosystem as part of the digital markets competition regime. It’s accessing whether Microsoft’s licensing practices and product integration could reduce competition as AI becomes embedded in businesses.

“The UK will benefit most where customers can access the best tools in the market, and mix and match software and AI services from a broad range of competing suppliers. It is therefore important that competition in business software is working well,” the CMA said as it launched the investigation in May.

It says it has heard that UK businesses may not always be able to effectively combine Microsoft’s software with that of other providers, limiting the ability to get access to the best products at the most competitive prices. The investigation will include how AI competitors are able to integrate with Microsoft’s business software, giving customers access to AI software across suppliers to best suit their needs. The results of the investigation must be announced February 2027.

Those developments align with the dependency trends identified in the IBM study, which found organisations are already operating across multi-layered AI environments, but lack full visibility into how those dependencies are structured. Dependencies extend across vendors, models and infrastructure, creating challenges in assessing risk, managing change and responding to disruptions.

‘Selective’ AI sovereignty

The report positions ‘selective’ AI sovereignty – the ability to apply control across data, models, and AI infrastructure in proportion to business risk and strategic value –  as the key to maintaining control over AI.

“In reality, enterprises don’t control AI. They control a tangled web of contracts, architectures, data flows, and operational choices spread across a complex estate,” the report notes.

Seventy-five percent of executives who have switched, or attempted to switch, AI vendors in the last two years say the process was difficult due to data portability, model revalidation, compliance requirements and technical lock-in.

“Sovereignty is not an on/off switch. It’s more like a set of dials, each tuned to a specific business impact.”

The report recommends organisations classify AI systems into tiers – mission critical or differentiating systems, important but non-differentiating capabilities, and operational or commodity services – and apply different sovereignty expectations to each.

The report says the tiered approach establishes a shared language for decision-making, enabling CIOs, COOs, CFOs and business leaders to align on how much control is required, where vendor dependency is acceptable, and where optionality must be engineered. It also creates a consistent way to coordinate decisions across the enterprise – managing policies,

dependencies, and trade-offs with shared visibility.

“Not all AI is equal, and the operating model must reflect that.”

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Amanda Williamson, director of Deloitte’s New Zealand Artificial Intelligence Institute, says most businesses are seeing productivity gains from AI use, but few can link that to revenue gains.

“Experiments do seem to be quite easy to do.”

“AI’s value is hitting the cost line, where it’s easy to see, but not the revenue line. So CFOs are not really clear on how to book it as growth,” she told iStart.

At the same time, research company Omdia says organisations are still approaching AI as a technology investment, rather than defining clear business outcomes – creating a ‘blind spot’ in measuring real returns.

One of the consistent themes across both sets of research is a disconnect between perceived and measurable value. On the ground, teams are using AI tools extensively and seeing benefits, particularly in areas like back office processing and customer interactions. But those gains are rarely tracked in a way that ties back to financial performance.

“We’re really bad at measuring AI right now,” Williamson says. “We’re not tracking value like we would other investments.”

The Omdia research, which included Australia and New Zealand and was conducted for Boomi, found 34 percent of organisations were unable to effectively measure the success of their AI initiatives.

The ROI blind spot

Michael Barnes, chief analyst enterprise IT Asia at Omdia, argues the problem starts with how organisations approach AI in the first place.

“There’s the erroneous assumption, or misguided belief, that somehow technology has value in and of itself,” he told iStart. “That’s simply not the case.”

AI is being treated as an extension of existing IT spend, rather than a strategic business transformation, meaning each new initiative adds complexity, rather than value.

He says organisations need to start with outcomes – something most are not doing.

“Experimentation with no clear end goals isn’t going to cut it. Think in terms of actual business outcomes and then work backwards towards the AI strategy.”

He admits it’s not easy. “It’s hard to engage the business, or have the business lead discussions with a focus on outcomes, when they don’t fully understand the capabilities of the technology.”

Without that outcomes-led approach, AI initiatives remain disconnected from the metrics that matter. And that, in turn, makes it difficult to justify investment and even harder to scale projects and reposition AI as a growth driver.

“Organisations need to have a better sense of outcomes in order to justify budgets for AI within particular business units,” Barnes says.

“The more different business units can clearly understand the value of AI and link that to their measurable outcomes, the more we will see AI budgets linked to those particular business units,” he says.

A/NZ decision makers were the most pragmatic and least enamoured of the potential value of AI and slightly more focused on the challenges that need to be overcome in Omdia’s research, with New Zealand decision makers being even more so than Australian respondents.

In growth markets such as the Philippines and Malaysia, there was a significantly higher expectation that technology would drive business growth or innovation.

That was also clear in the Deloitte research where just 23 percent of Kiwi CFOs saw application of technology, including AI, as a top three growth driver. That’s compared with 30 percent Apac-wide.

Acquiring new customers, increasing sales to existing customers, operational efficiencies, price increases and innovation all ranked ahead of technology for New Zealand CFOs.

Stuck in productivity mode

A key issue remains where organisations are focusing their AI efforts.

Many AI deployments are aimed at improving individual productivity – helping staff generate content, process information more quickly or automate small tasks. While useful, those gains don’t always translate into measurable business impact.

“Focusing on individual level productivity is only going to give us so much in terms of actually getting a return on investment from pilots and AI in general,” Williamson says. “We really need to focus on the whole of the workflow – where is AI really going to make a difference?”

Instead of a scattergun approach, putting efforts into many different ‘hobby projects’, she’s calling on local organisations to focus on where AI might really shift the dial.

“I’m seeing a lot of good effort and good time being spent on projects that you probably can tell upfront would not have been worth the time and effort. So get to the core of value.”

The inability to prove value is also showing up in the gap between experimentation and scale.

While AI pilots are widespread across Australia and New Zealand – covering everything from invoicing to customer-facing tools – many stall before delivering enterprise-wide impact.

“Experiments do seem to be quite easy to do,” Williamson notes. “But getting it into something that scales can be a real challenge because scaling forces you to confront clean data, a motivated team, a real workflow.”

The measurement gap is being reinforced by two practical challenges: Data and cost.

On the data side, both Williamson and Barnes point to long-standing weaknesses in data quality, integration and governance, that were often deprioritised in favour of more visible initiatives. As Barnes notes, AI has made data quality issues ‘very obvious, very quickly… up to board level’.

On the cost front, AI introduces a new level of unpredictability compared to traditional IT investments, with Williamson noting AI is opening up a whole new era of calculating costs. The shift – or tokenomics – makes it harder to build a reliable business case. (You can read more on tokenomics and how to address the issue in our earlier story.)

What needs to change

For CIOs, CTOs and CFOs the message from both Williamson and Barnes is consistent: The issue is not lack of capability, but lack of discipline.

Organisations need to define outcomes clearly and at a function level, with broad concepts like ‘productivity’ or ‘automation’ not sufficient.

“Outcomes for AI need to be context specific – they’re going to be very different by function,” Barnes says. “You can’t talk about process improvement or productivity improvements, that doesn’t necessarily mean anything in business terms. The question is always towards what end?

“Yes, you’ve improved productivity, but what does that mean for your staff, whether it’s your call centre or your fraud detection unit? What are you enabling staff to do that they can’t currently do – that needs to be thought through because in most cases, it isn’t simply a cost saving exercise.”

Measurement needs to be built from the outset, including clear baselines and post implementation tracking. “Measure what is the efficiency is without it and what it is afterwards,” says Williamson.

She says organisations also need to focus on end-to-end workflows, rather than isolated use cases, saying that’s where AI can begin to drive meaningful, measurable impact.

And finally, foundational issues, particularly around data, must be addressed if organisations want to move beyond experimentation.

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The admission relates to a February 2022 market update in which the ASX said the upgrade was ‘progressing well’ despite internal classifications at the time showing significant risks and unresolved issues.

“As market operator and a steward of critical market infrastructure, our words matter.”

Under the proposed resolution, agreed to by the ASX and ASIC (the Australian Securities and Investments Commission), the two organisations will ask the Federal Court to find the ASX breached provisions of the ASIC Act, impose the $20.5m penalty and order ASX to pay an additional $3m towards ASIC’s legal costs. The settlement is subject to court approval and will avoid a trial in proceedings first filed by ASIC in August 2024.

Other allegations of misleading statements – including claims by ASX that the project was ‘tracking to a published plan’ and ‘tracking to go-live in April 2023’ have been dropped as part of the settlement.

At the centre of the case is the Chess (clearing house electronic subregister system) replacement project, a long-running effort to modernise the clearing and settlement infrastructure underpinning Australia’s equities market, with a distributed ledger based platform. The system sits at the core of how trades are processed, settled and recorded, making it critical financial market infrastructure.

ASIC says the ASX misled the market by overstating the health of a project which, internally, was already experiencing significant delivery challenges. The ASX has since admitted that as early as December 2021 the project was no longer on the critical path required to meet its planned April 2023 go-live date. At the time of the February 2022 announcement publicly claiming the project was progressing well, the project was classified ‘red’ internally – denoting significant unresolved issues or risks – and had been at that status since December 2021. Industry test environments had been opened, and others were planned, but were unable to do all that the system had been scoped to do.

About six weeks later, in March 2022, the exchange disclosed that go-live would likely be delayed. The project, which began in 2016 with initial expectations of rollout around 2020, then moving to a planned go-live of April 2023, was subsequently paused and ultimately abandoned after six years work and $245-$250 million in spend.

A review by Accenture in 2022 was scathing, finding significant challenges and deficiencies in the project.

In 2023 the ASX offered $70m in incentives, including rebates on clearing and settlement fees, to encourage brokers to help redesign the system.

Market-wide implications

Sarah Court, ASIC chair, says the ASX’s admission of a misleading statement went to the accuracy of disclosures about a major technology initiative with market-wide implications.

“ASX has admitted to making a misleading statement in relation to critical market infrastructure at the centre of Australia’s financial system,” Court says.

She added that accurate and timely disclosures are fundamental to maintaining trust in Australia’s financial markets, particularly from entities that operate core market infrastructure.

David Clarke, ASX chair, says the settlement reflected the exchange’s responsibility to ensure the market can rely on its communications about major operational programs.

“The market must have confidence in what ASX says about its operations as these statements can be relied upon to make decisions,” he says.

“When we stopped the Chess project in November 2022 to reassess our whole approach, that tested market confidence in ASX and called into question the nature of statements previously made.

“As market operator and a steward of critical market infrastructure, our words matter. I am sorry ASX fell short.”

“Firmer footing” for new system

Clarke says the project is now on a ‘firmer footing’.

ASX interim CEO Darren Yip says Chess remains a ‘critical priority’.

“Just two months ago, the team successfully delivered release 1 of the new system, providing clearing services on a modern, cloud-aligned platform,” Yip says.

That system is based on Tata Consultancy Services’ BaNCS for Market Infrastructure and Quartz Gateway offerings.

Release 1 replaced the clearing component and introduced financial information exchange messaging for trade registration. Release 2, focusing on post-trade modernisation, is targeted to go-live in 2029 and will replace the settlement and subregister functionality, deliver improved corporate action functionality and make further enhancements to clearing. The introduction of global standard ISO20022 messaging interfaces will also be part of release 2.

The case highlights the regulatory scrutiny that can be applied to communications about large-scale tech transformation programs, particularly where those programs underpin core business or market operations.

The Chess replacement project’s scale, complexity and integration across market participants meant delays and performance issues had implications beyond the ASX itself, affecting brokers, investors and other market infrastructure participants.

ASIC says the February 2022 statement exposed market participants to the risk of financial harm, underscoring the extent to which disclosures about technology delivery timelines can affect planning, investment decisions and operational readiness across dependent organisations.

ASIC says it has obtained commitments from the ASX to strengthen oversight, governance and oversight of the replacement program.

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For enterprise technology teams in Australia and New Zealand, the impact was immediate: Tools they expected to use were suddenly unavailable, and outside their control.

“There are real and valid concerns for enterprises in terms of stability.”

Anthropic was forced to ‘abruptly disable’ its Fable model – launched on June 9 – along with Mythos, for all customers after an export-control directive restricted access by foreign nationals over ‘national security concerns’ – reportedly over concerns of jailbreaking. That category was impractical to enforce technically according to Anthropic, leading to a full shutdown.

The shock goes beyond a single model release, highlighting the confused state of AI regulation and signalling a shift in how risk needs to be managed.

Sam Higgins, Forrester vice president, principal analyst, says the Anthropic shutdown fits a broader pattern he flagged several years ago, saying the 2020s were a decade of systemic risk, including geopolitical risk.

“Geopolitics was going to drive a wedge between tech markets,” he says, pointing to a longer-term trend toward fragmentation.

That fragmentation may now be accelerating, with traditional assumptions that allied counties would have continued access being challenged.

“There are regularly carve outs for Australia, New Zealand… I was surprised not to see them,” Higgins says, of the lack of exemptions in the export controls.

The result is that enterprise access to frontier AI is no longer guaranteed – even in aligned markets.

“If traditional allies are cut off we will start to look elsewhere,” Higgins says, suggesting diversification away from US providers.

The shutdown comes against a backdrop of tension between Anthropic and the Trump administration. The company very publicly disagreed with the Pentagon, refusing to allow the US military to use its models for domestic surveillance and fully autonomous weapons systems. It was blacklisted by the Department of Defense as a ‘supply chain risk’.

Higgins notes that ‘it seems odd’ that Anthropic seems to be targeted again. “This feels like strike two,” he notes.

While the underlying motivation for the shutdown might be unclear, the outcome is not.

“There are real and valid concerns for enterprises in terms of stability,” Higgins says, noting the impact of policy decisions that extend beyond technical issues.

Cybersecurity experts have also been quick to criticise the ban and shutdown, describing it is ‘dangerous’ and warning that it has taken the best models away from defenders while failing to meaningfully limit attackers.

In an open letter, they also argue the capabilities cited – such as identifying software vulnerabilities – are not unique to Anthropic’s models and can be replicated using other tools. Removing the capabilities from security teams could increase overall risk while adversaries continue to develop similar capabilities unchecked, they say.

Local impacts

The impact has landed quickly with regional businesses.

Amanda Williamson, director of the Deloitte Artificial Intelligence Institute told iStart the move is an inflection point for organisations. “It’s a very big deal,” she says.

“With a large technology vendor essentially switching off their AI… I think we’re about to see many leaders wake up to the huge dependence that we have on our fundamental systems.

“As we build more and more on AI, we need to be more resilient if we’re going to have our fundamental operations relying on it.”

She notes locally we’ve been working with two AI superpowers – China and the US, highlighting reliance on external providers. “This will help organisations really think about this and raise the question of AI sovereignty.”

The shutdown forces a rethink of that dependency, bringing the issue of AI sovereignty to the forefront, she says.

“The definition of sovereignty isn’t necessarily clear and consistent from an organisational standpoint,” Michael Barnes, Omdia chief analyst enterprise IT Asia, told iStart. “ What they’re thinking about is how to mitigate risk and ensure they are able to continue to operate and have access to whatever underlying capabilities – including models for AI – that they need.

“This announcement is a stark reminder that we need to be more aware of control, and that some of that access is outside their control – and that level of uncertainty is likely only to increase. This isn’t just a blip.”

Barnes says he’s ‘absolutely’ seen a growing concern among decision makers in New Zealand in particular. “We’ve had some conversations where it’s very much a case of we need to act now, we need to accelerate our level of access or even creation of our own models – things that give us an increased level of control, or if not control, then certainly visibility so we can mitigate risks when and if they happen.”

Other regions are already investing in alternatives. Higgins notes Singapore has made significant investments in their own frontier models pouring ‘truckloads’ of money into sovereign AI.

“This will drive some real thinking about what sovereignty means,” Williamson says.

A recent Forrester Sovereignty Forecast put Australia at the bottom end of the tech sovereignty index. Higgins believes New Zealand – which wasn’t included in the report – would be slightly lower than Australia, given the lack of hyperscale cloud capacity.

Reframing enterprise risk

Williamson says many organisations have simply been switching on the AI model. Provided in whatever technology stack they have access to.

“But there are other things which can be done like using open weight models.”

Those open weight models – essentially open source – changes the cost structure, but does require having some hardware.

“Now is a good moment to start exploring what that could look like and if there are certain use cases where it makes sense to switch out the model and approach and get CFOs and engineers to come up with smart plans for doing AI efficiently”, she says.

It’s not all up to business however. Higgins says governments need to step up too.

“This goes to the bigger question of do we really understand where we have agency as it relates to our sovereignty and where we should and shouldn’t invest? And if we’re not going to invest, what’s the economic continuity plan?

“This is a risk assessment at the end of the day. If you can’t control the hazard and remove the risk, then you need at mitigation strategy – and at the moment it doesn’t feel like governments on either side of the Tasman have any mitigation strategy in place.

“We should ask ourselves some hard questions about what arrangements we have in place with the US so that this doesn’t happen again,” he says, while acknowledging that governments are currently dealing with some unprecedented policy shifts by an often challenging administration to deal with. “And if we can’t guarantee that, what’s our Plan B? Every business has a business continuity plan. What’s our ECP – economic continuity plan? That’s what’s missing and voters should be demanding that from our governments.”

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That warning from the Gartner distinguished vice president, analyst, encapsulates a turning point for enterprise AI, and comes as the Linux Foundation moves to tackle AI token cost management and address rising AI costs.

“Get clear and understand those token costs and alternative methods organisations have to remedy the ills of the token cost burden.”

The Tokenomics Foundation, launched by the Linux Foundation this month, will focus on establishing open industry standards, benchmarks and best practices for the economics of AI infrastructure. Its launch comes as enterprises grapple with rising costs and uncertain returns from generative AI and agentic AI.

At the centre of that shift is a fundamental change in how AI is priced – and how organisations experience its costs.

Unlike traditional enterprise software, which is typically priced per user or per licence, AI is increasingly consumed on a usage basis. Costs are increasingly tied to how much compute is used, measured through tokens – the basic, fundamental unit of data that LLMs process and generate. The more complex a task, the more tokens it requires.

And while per-token costs fell heavily during 2023-2025, the Linux Foundation says they have now levelled off and new model token prices are rising, making AI the largest and fastest-growing line item on enterprise technology budgets.

Dr Amanda Williamson, Deloitte New Zealand AI Institute Director, told iStart AI is opening a whole new era of calculating costs and introducing a level of unpredictability unfamiliar to many enterprise buyers.

“What we’ve been observing around New Zealand is a lot of leaders have been rolling out AI tools, and AI is a tricky little beast because you roll it out and suddenly you get surprises with consumption costs around it,” she says.

“As usage continues, sometimes we have no idea how much it’s going to cost over the next six months or even the next six days because it’s based on usage as opposed to seats,” Williamson says.

This shift – commonly referred to as tokenomics – means organisations are no longer buying fixed capacity. Instead, they’re paying for every interaction, query and workflow processed by AI systems.

For some, that’s hurting. Uber’s CTO Praveen Neppalli Naga recently revealed that the company had exhausted its entire 2026 budget on AI coding tools in just four months, driven by ‘token-maxxing’, where engineers were encouraged to maximise usage. Another, unnamed, enterprise business reportedly accrued a US$500 million bill for Anthropic’s Claude AI in a single month after giving employees unrestricted access and uncapped usage of API tokens for agentic AI workflows.

The economics of AI are also being shaped by supply-side constraints.

Chandrasekaran notes that generative AI was a ‘consumerisation phenomenon’. Tools used in personal lives have moved into the enterprise. The companies making those tools have an incentive to continue to serve the consumer market, because it’s a big brand factor and a pull factor for them into the enterprise.

Vendors prioritised growth and adoption, offering relatively low-cost access in order to build user bases – and the all important data advantages: the more users, the more data to train models on, the better your model becomes

“We were getting access to AI often at a subsidised rate, and we were often able to just purchase it with a per seat approach,” Williamson says.

That, however, was the old world. Williamson notes a few weeks ago, things started to shift.

“There are a few factors that are making it really hard for them to continue to subsidise AI,” Chandrasekaran says.

Alongside the token maxing trend, he points to the rise of AI agents. Unlike AI chatbots, which are more asynchronous workflows, AI agents have more autonomy and are able to make sequential or parallel requests to AI models running in the back end – leading to AI models being hit with more requests from AI agents. Goldman Sachs has estimated agentic AI could see token use increase by over 24 times by 2030.

A scarcity of compute, with construction of many of the data centres planned to support the AI boom now delayed, has also driven the shift from surplus to scarcity, with direct implications for pricing.

Organisations that previously relied on predictable, low-cost access to AI are now facing the prospect of rising and variable costs tied to usage patterns, as vendors GitHub with AI Copilot, start transitioning to a token-based – or consumption – pricing and Anthropic and OpenAI move to pay-as-you-go models, charging business users for compute resources.

GitHub’s move prompted plenty of Reddit discussion and angst, with one user noting their bill would be going from US$25/month to US$750/month.

“Suddenly enterprises are worried because they don’t know what their downside is with the token-based pricing model because they don’t have tools, they don’t have instrumentation to really measure that token usage within the organisation,” Chandrasekaran says. “So there is a lot of worry, and rightfully so, around what the changing consumption pattern, the change in pricing model really means for long-term TCO of AI within the enterprise.”

Adds Williamson: “AI’s value is hitting the cost line… not the revenue line.”

While AI-driven productivity gains are widely acknowledged, many organisations are still struggling to quantify those gains in financial terms – particularly when it comes to revenue growth.

“Everyone’s using AI and feeling more productive, but very few can yet measure AI lifting revenue,” she adds.

As a result, AI is often being assessed through a cost lens, rather than as a driver of top-line growth.

At the same time, token-based pricing means those costs are becoming more visible—and, in many cases, harder to control.

For CFOs and technology leaders, this is creating a new area of focus: Managing token consumption.

Token usage can increase rapidly as organisations adopt more advanced AI capabilities, particularly those involving multiple chained interactions or automated workflows.

Even relatively simple use cases can drive higher-than-expected costs if usage scales across teams or business units, making cost visibility and measurement critical.

Engineering for efficiency

As token costs rise, organisations are being pushed to adopt more disciplined approaches to AI deployment.

One key lever is efficiency in model selection and system design.

“You don’t always need to use the best, most token-hungry AI models,” Williamson notes, highlighting the importance of matching model capability to use case.

“This is a great moment to start thinking about what models we’re using and when.”

Until now, most organisations’ approach has been to switch on the model provided in whatever tech stack they have access to, but Williamson notes use of openweight models – effectively opensource models you can get without paying normal fees – changes the cost structure, though they do require having hardware.

“There are certain use cases where it might actually make sense to switch out the model and switch out the approach and get the CFOs and engineers together to really come up with a smart plan for how to do AI efficiently,” she adds.

Optimising workflows – reducing unnecessary queries and improving system design – can have a significant impact on token usage.

Ultimately, tokenomics represents a shift in how organisations think about AI – from a relatively predictable tech investment to a dynamic, consumption-driven service, requiring a new level of financial discipline.

“Get clear and understand those token costs, how the world of token costs is shifting and alternative methods organisations have up their sleeve to be able to remedy the ills of the token cost burden,” Williamson says.

“Learn about token costs of AI and how to do it efficiently. There’s always going to be a cost-benefit analysis to decide to go forward or not with AI, and if the costs cannot be managed, then it’s going to be a non-starter.”

For many organisations, that means building closer alignment between finance and technology teams, improving measurement frameworks, and developing a clearer understanding of how AI usage translates into business value.

Standards emerge as costs rise

The Linux Foundation’s move to establish the Tokenomics Foundation reflects the growing importance of these issues.

As enterprises navigate shifting pricing models, rising infrastructure costs and evolving usage patterns, the need for standardisation and best practice is becoming more acute.

By focusing on benchmarks and economic frameworks, the initiative aims to bring greater transparency and consistency to how AI costs are measured and managed.

“Measuring and benchmarking token efficiency across different models and vendors is critical to how organisations make business decisions, but until now, there was no neutral home to develop the standards needed to measure token economics transparently across the entire supply chain,” says Jim Zemlin, Linux Foundation CEO. “The Tokenomics Foundation provides that neutral home, ensuring these standards remain open and community-driven.”

For enterprises, that could help reduce uncertainty—and provide a clearer path to scaling AI sustainably.

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Fei, a Gartner director analyst, says in many enterprise environments, agentic analytics can introduce additional cost, complexity and risk – particularly where decisions are routine, tightly regulated or based on immature data foundations.

“Bad insights become bad decisions at scale. And that’s a much bigger problem.”

Analytics and business intelligence platforms are increasingly integrating AI agents to transform how data is analysed and insights are delivered, and businesses across Australia and New Zealand are increasingly experimenting, often layering new capabilities onto existing data environments. Many already have well-established reporting platforms in place and are now looking to extract more value – particularly through natural language interaction and automated insights.

But Fei told attendees at this week’s Gartner Data and Analytics Summit in Sydney that the push to add agency to analytics workflows needs tighter discipline. She says AI agents fundamentally change how analytics operates, and that shift is not suited to every use case.

At its core, agentic analytics moves organisations away from the traditional linear BI workflows – where data is cleaned and transformed, queried and visualised in dashboards, step-by-step, before insight is interpreted manually – into systems where agents handle much of the heavy lifting. These agents can set multi-step processes, automating data preparation and generate insights with minimal human intervention and in a more conversational based interface.

“The biggest trend here is that Ai agents are going to proactively detect changes in context and adjust insights and actions,” she says, noting that the key thing about agents – differentiating them from traditional automation – is they are goal-driven, not task-focused.

That shift has clear appeal, but also introduces new requirements around governance, trust and data readiness that many organisations are still grappling with.

Where agents don’t belong

Fei was clear that agentic analytics isn’t a universal fix, and is ‘overkill’ in many cases and actively counterproductive.

“There are some situations where it makes sense to just adopt a traditional reporting tool or BI, rather than agentic analytics.”

Among those are highly regulated environments, which need strict compliance and auditability. Traditional analytics workflows remain better suited where decisions must be fully traceable, deterministic and auditable. In areas such as large financial reporting, organisations need to understand exactly how outputs are produced – something that can be challenging with systems built on large language models.

Similarly, routine business processes offer little justification for introducing agents, Fei says. Where the objective is simply to view static metrics or track recurring KPIs, without the need for adaptive decision, agentic analytics adds unnecessary overhead without delivering additional value.

“These are low ROI use cases,” Fei says, noting that agentic systems typically require significant investment across compute, integration and governance.

In these scenarios, organisations risk over-engineering solutions and introducing complexity where existing tools already meet business needs.

Data maturity still dictates success

Beyond use case selection, the success of agentic analytics hinges on the underlying data environment.

Fei is clear: Organisations with immature data foundations are unlikely to succeed. Instead, she recommends addressing data integration and quality issues before attempting to deploy AI agents at scale.

“AI won’t solve your data issues. It only amplifies them,” she says.

“If the data is immature itself and the overall integration readiness is low… you won’t be successful with agentic analytics.

That has implications for organisations attempting to build more advanced capabilities on top of existing reporting systems. While there is clear momentum to make data more accessible and interactive, the underlying governance, semantics and quality still need to be in place.

The cost of getting it wrong

Agentic analytics doesn’t just change how insights are produced, it changes where risk sits.

Fei notes once organisations introduce AI agents into analytics workflows, the stakes move beyond reporting errors. “The truth is AI will make bad analytics organisations fail faster.”

Impact will be amplified. “The impact is not just bad insights but bad decisions at scale. That’s a much bigger problem.”

She says that helps explain why 32 percent of respondents in a recent Gartner survey believe truly usable AI agents remain a distant reality. The same survey showed only 19 percent of those surveyed are using AI agents to some extent on a daily basis.

Avoiding agent washing

Fei also called out agent washing. “Not everything offered or claimed as an AI agent is indeed an AI agent.”

She says agent washing is emerging as a prevalent trend, with vendors rebranding legacy features as AI-powered or agentic capabilities, often without meaningful innovation. In some cases products rely on basic natural language queries, scripted workflows or pre-defined reports, while presenting them as autonomous systems.

The absence of key features such as multi-step reasoning, hypothesis testing or proactive recommendations, signals the tools are not agents.

That widespread agent washing is threatening to undermine customer trust and stall true innovation, and is creating market friction and pervasive AI fatigue among B2B buyers.

Fei urged organisations to adopt an evidence-based evaluation when it comes to agents, evaluating them on real-world scenarios, and implementing task-driven acceptance tests. That includes assessing how systems handle enterprise data volumes, complex integrations and governance requirements. She also recommended engaging in detailed roadmap discussions with vendors and urged prioritising explicit transparency features, such as code visibility, confidence scores and semantic grounding, when selecting agentic offerings.

The path forward

Rather than pursuing broad deployment, Fei points to a more structured, refined, AI adoption model.

The first step is defining where agentic analytics truly add value, focusing on use cases with clear decision logic, strong data foundations and a need for adaptive insights. She suggested picking three to five low-risk high-value use cases as starting points.

From there, Fei says organisations can take a stage approach, establishing cross-functional teams, testing shortlisted platforms, running proof of concepts with task-driven acceptance tests and ultimately scaling wins, raising autonomy where trust is earned and adopting multiagent platforms.

Fei’s underlying message is clear: Agentic analytics represents a significant evolution in how organisations interact with data – but it is not a replacement for all existing analytics practices.

“It’s not everywhere for all your use cases,” she says.

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The Hays Salary Guide FY26/27 shows a market caught in an uncomfortable middle: Pay rises are modest or non-existent for many workers, yet employers continue to report widespread skills shortages across industries.

Despite softer salary movement, organisations are still struggling to find the capabilities they need. Hays reports that 82 percent of organisations experienced skills shortages over the past year, up from 79 percent the year prior, with Australia (79 percent) feeling it harder than New Zealand (75 percent). Tech, however, isn’t feeling the pain as badly as many other sectors – Hays has the ‘technology’ category experiencing skills shortages seven percent lower than average, with ICT 14 percent lower than average and software and services three percent lower. Hurting the most is the engineering sector – it is +12 percent above average when it comes to shortages.

“Budgets may be tighter, but critical tech roles don’t wait.”

At the same time, the guide highlights that pay growth has been modest, with hirers reporting an average salary increase of 3.3 percent in New Zealand and 4.0 percent in Australia across all roles. Many (42 percent), however, are reporting either no increase, an increase below 2.4 percent or even a decrease.

The result is a market where demand remains strong, but pricing power is constrained. That’s forcing a shift in how organisations compete. Instead of relying purely on salary increases, employers are being pushed to look at broader workforce strategies, particularly in high-demand areas such as technology and digital.

Robert Half’s 2026 New Zealand Salary Guide reinforces the trend, noting that organisations are rethinking compensation strategies to attract professionals with the specialised skills needed to ‘maintain a competitive edge’ particularly as digital transformation continues to drive hiring decisions.

What roles are earning

While overall salary growth is muted, pay for technology roles, particularly specialised ones, is holding up.

The Hays salary guide includes detailed benchmarks across dozens of tech roles in Australia and New Zealand.

Technology salaries in New Zealand ranging from around $55,000 to $80,000 for entry-level service desk roles, while the same role in Australia garners from $51,000 to $80,000.

Those with SAP expertise can also command higher salaries, with the difference between Australia and New Zealand also more stark – and the differences between Australian states also more apparent. While an SAP Functional Consultant will see a ‘typical’ salary of $200,000 in NSW, in Queensland it drops to $160,000, and in Tasmania and NT its $145,000 and $150,000 respectively. Across the ditch, Kiwis in the same role will see a typical salary of $160,000.

More senior Dynamics 365 professionals are also commanding big salaries, with functional consultants on par with their SAP counterparts, as are Oracle and Salesforce functional consultants.

Australian AI engineers are seeing typical wages of $155,000 (Tasmania) to $180,000 (NSW and ACT), while their Kiwi counterparts are typically receiving $165,000 (Christchurch) to $180,000 (Auckland). Senior AI engineers meanwhile are commanding up to $250,000 in NSW. It’s the GenAI engineers, however, who are reaping the big returns, with typical ACT salaries $220,000 – and up to $285,000. NSW follows closely with a typical salary of $215,000 and a high end of the range of $280,000. In New Zealand, it’s much more muted, with Auckland genAI engineers commanding the highest typical salary of $170,000, and up to $210,000.

Data and analytics roles are also showing strength, as are cybersecurity roles. CISOs in Victoria are seeing between $200,000 to $350,000, with a typical salary of $280,000; NSW and ACT are seeing between $200,000 to $340,000, while New Zealand CISOs are seeing between $180,000 to $350,000.

Robert Half data meanwhile shows entry-level IT support roles sit around NZ$60,000 to $70,000, while more experienced systems administrators can command up to $95,000. More specialised roles attract significantly higher salaries. An AI engineer can command $120,000 to $160,000, with an AI tech lead, driving the design, implementation and delivery of AI solutions, commanding up to $220,000.

Hiring pressure and retention risks

Robert Half’s IT-focused data shows talent shortages, digital disruption and economic uncertainty are all shaping the tech hiring environment, with organisations recognising that skilled IT professionals are critical to maintaining operations and competitiveness.

Even in a more cautious market, hiring urgency remains a factor. A significant proportion of tech leaders say the need to fill roles quickly is influencing their willingness to increase salary offers during negotiations. In other words, budgets may be tighter, but critical tech roles don’t wait.

That tension is reflected in how organisations are allocating compensation. While overall salary growth is moderating – Robert Half puts increases for most employers at three to five percent – employers are still prepared to pay more for candidates with in-demand skills, particularly those tied to ‘rare or emerging skills’ particularly in AI, data engineering and automation. Those three areas are also seeing counteroffers becoming more frequent as companies compete for talent.

With salary budgets constrained, both Hays and Robert Half point to a broader shift in how organisations compete for talent. Non-monetary factors, including flexibility, training opportunities and career development, are becoming increasingly important in attracting and retaining skilled employees.

The rise of hybrid work also reflects this shift. Hays reports hybrid arrangements are now the norm for a large proportion of employees, signalling that flexibility is no longer a differentiator, but an expectation.

At the same time, employers remain willing to negotiate for candidates who bring specialised skills and can deliver immediate impact.

While a topline glance might suggest a relatively stable labour market, the data suggests pressure is building.

Hays’ findings show many professionals are feeling underpaid, though despite the rising cost of living, dissatisfaction scores are largely in line with those seen last year, with 29 percent feeling dissatisfied or very dissatisfied (seven percent) and 29 percent feeling neutral. Just nine percent feel very satisfied, with the most satisfied tending to be more senior, higher income earners who had had a greater salary increase in the past 12 months.

Among tech workers, that isn’t translating into increased job hopping, however, with IT managed service providers, ICT and technology workers among those most likely to have longer tenures.

AI demand rising faster than capability

Compounding the issue is the acceleration of AI adoption.

Hays data, which is drawn from surveys with more than 7000 people across Australia and New Zealand, shows that 60 percent of employees are already using AI at work, but only a minority (22 percent) have received formal training. That flies in the face of what employers are saying, with just 27 percent of employers reporting no AI training or support is provided.

That gap is creating a new layer of demand, not just for technical roles, but for employees with the practical capability to apply AI effectively. Hays notes that on the hiring side, no agreed standard exists for evidencing AI capability. “[Employers] are split: 69 percent point to portfolio or practical examples, 52 percent to internal assessment, 49 percent to professional references, while 43 percent say none of the listed credentials suffice. Forty percent are seeking university or formal academic qualifications.

“The competency question is open and that ambiguity is itself an opportunity to bring structure.”

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The deployment, built on Amazon Connect, has shaved more than two-and-a-half minutes off average calls for the 150+ year old company, one of New Zealand’s largest publicly listed general insurance companies, removing more than 796,000 minutes of customer time across sales, service and claims interactions.

“By bringing interactions into a single platform and integrating customer data, we’ve enabled real-time meaningful AI support for our frontline teams.”

But the more telling detail sits behind those numbers.

Paul Johnston, Tower CEO, told iStart the project centred on consolidating customer interactions into a single platform and combining that with integrating customer data to deliver AI support as conversations unfold.

“By bringing interactions into a single platform and integrated customer data, we’ve enabled real-time meaningful AI support for our frontline teams,” Johnston says.

That support is delivered during live calls, with real-time transcription across every call and AI-assisted guidance removing the need for agents to pause interactions to take notes or search for information, and there’s less chance of missing important details.

Rather than building bespoke AI capability, Tower leaned on what was already available within its platform, with Johnston saying most of the capabilities were delivered out-of-the box, with effort focused not on customisation, but integrating those tools into day-to-day operations.

The core of that work sat in data and knowledge.

“Our focus has been on strengthening our core knowledge base and integrating this seamlessly with the platform, ensuring agents receive accurate, up-to-date guidance,” Johnston says.

That meant ensuring information feeding AI responses was well-governed and current, so it could be surfaced in real-time to support customer conversations.

The deployment was designed to sit inside existing workflows rather than alongside them. Johnston says embedding AI into how work was already done reduced friction during rollout and allowed the system to evolve based on frontline use.

Real-time feedback loops

“We’ve been able to continually refine the platform based on what actually works best for our teams,” he says. Real-time feedback loops ensure continual improvements in responses. Involving frontline ‘change champions’ throughout also aided the process, he says.

As a result, Johnston says teams quickly saw benefits, with AI supporting conversations, reducing complexity and improving consistency in responses.

“Our ability to adapt and adopt has been a real strength, supported by a strong culture of innovation and a focus on bringing our people on the journey from day one.”

Alongside the reduction in handling times, he says employee and customer net promoter scores (NPS) have improved, while quality assurance coverage has increased.

The system is also generating a richer data set to inform future product and service decisions.

Monitoring is built into the deployment. Johnston says quality is assessed – and improved – using automated evaluation alongside agent feedback, providing real-time visibility and enabling issues to be identified and addressed as they emerge.

Across the project, Johnston points to a combination of strong data, well-governed knowledge and workforce engagement and empowerment as underpinning the outcome.

“A big part of our success has come from getting those foundations right, while continuing to build and improve over time.”

Johnston describes the work as part of a broader digital transformation, with further opportunities to expand how AI supports both customers and frontline teams.

“We see this as part of our ongoing digital transformation, with continued opportunities to scale and evolve how AI supports both out people and our customers,” he says.

“Looking ahead, we’re poised to invest further in technology and AI-enablement throughout FY26. This is a critical part of our strategy that will drive greater efficiencies and continue to enhance our customer experience over the medium- and long-term.”

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