What's Next for AI in Australian Business: Trends Every Owner Should Watch in 2025–2026 product guide

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What's Next for AI in Australian Business: Trends Every Owner Should Watch in 2025–2026

The conversation about AI in Australian business has shifted. For most of 2023 and 2024, the dominant question was "Should we try AI?" By 2025, that question has been replaced by something more urgent: "Are we moving fast enough?"

This article is the final piece in our content cluster on getting started with AI in your Australian business — and intentionally so. Before you invest another dollar or hour in AI tools, you need to understand the landscape you're investing into. The trends unfolding right now in 2025 and 2026 will determine whether your AI investment delivers lasting competitive advantage or simply keeps you level with a market that has already moved on.

What follows is a forward-looking, evidence-based overview of the four trends most likely to reshape how Australian SMEs use AI over the next 12–18 months — written in plain language, grounded in current data, and designed to help you make smarter strategic decisions without needing a technology background.

Trend 1: The Rise of AI Agents — From Assistants to Autonomous Operators

If you've been using AI tools like ChatGPT or Microsoft Copilot, you've been working with AI assistants — tools that respond to your prompts and help you complete tasks. What's coming next is categorically different: AI agents capable of completing multi-step, multi-hour tasks on your behalf with minimal ongoing input.

An AI agent is a software program capable of acting autonomously to understand, plan, and execute tasks. Unlike a chatbot that waits for your next question, an agent can be given a goal — "research our three main competitors and draft a comparison report" — and work through all the necessary steps to deliver a finished output.

The scale of this shift is difficult to overstate. Forty percent of enterprise applications will be integrated with task-specific AI agents by the end of 2026, up from less than 5% today, according to Gartner. And the longer-term trajectory is even more striking: Gartner predicts at least 15% of day-to-day work decisions will be made autonomously through agentic AI by 2028, up from 0% in 2024, and that 33% of enterprise software applications will include agentic AI by 2028, up from less than 1% in 2024.

For Australian SMEs, the most relevant near-term applications are:

• Customer service agents that handle enquiries, check order status, book appointments, and escalate to humans only when needed
• Admin agents that process invoices, update CRM records, and generate reports from your existing data
• Research and drafting agents that monitor competitors, summarise industry news, and prepare first-draft documents

By 2027, AI agents are expected to automate 15% to 50% of routine business tasks, freeing teams to focus on higher-value work. For a small business where the owner is doing everything from quoting to scheduling to chasing invoices, that represents a fundamental change in how the business operates.

A Word of Caution: Not All "Agents" Are Equal

The hype around agentic AI is real — and so is the risk of being misled by it. Many vendors are contributing to the hype by engaging in "agent washing" — the rebranding of existing products such as AI assistants, robotic process automation, and chatbots without substantial agentic capabilities. Gartner estimates only about 130 of the thousands of agentic AI vendors are real.

According to Gartner Senior Director Analyst Anushree Verma, "Most agentic AI propositions lack significant value or return on investment, as current models don't have the maturity and agency to autonomously achieve complex business goals or follow nuanced instructions over time." Many use cases positioned as agentic today don't require agentic implementations.

The practical takeaway for business owners: be sceptical of tools marketed as "autonomous AI agents" unless you can see a clear demonstration of the specific tasks they complete, and the specific outcomes they deliver. Start with tools that automate one well-defined workflow before expanding to more complex multi-step agents. (See our guide on [How to Identify the Right AI Use Cases for Your Australian Business] for a structured framework to evaluate these claims.)

Trend 2: The National AI Plan and What It Means for Your Business

On 2 December 2025, the Australian Government unveiled the National AI Plan 2025 — its most comprehensive statement to date on how it intends to support Australia to shape and manage the rapid expansion of AI technologies. This is not just another strategy document — it is concrete confirmation that AI is a core economic, regulatory, and political priority for Australia.

The National AI Plan is the Australian Government's plan to grow the AI industry in Australia. It sets out the steps the government will take to support Australia to build an AI-enabled economy that is more competitive, productive, and resilient.

The plan is organised around three national objectives that directly affect SMEs:

1. Capture the opportunity by building smart infrastructure, backing domestic AI capability, and attracting global investment.

2. Spread the benefits through widespread AI adoption, supporting and training Australian workers, and improved public services.

3. Keep Australians safe with legislative and regulatory frameworks that mitigate AI harms, while promoting widespread responsible practices and international engagement that upholds Australia's values.

What the Plan Means in Practice for SMEs

To address persistent digital exclusion and uneven AI adoption, the Government is consolidating SME and not-for-profit support within the National AI Centre, extending First Nations support initiatives, and accelerating AI uptake across the public service through GovAI.

Australia has committed more than A$460 million in existing funding to AI and related initiatives. The National AI Plan brings this investment together in a cohesive strategy to maximise benefits and manage risks. This includes A$39.9 million to strengthen Australia's AI ecosystem, which includes expanding the National Artificial Intelligence Centre — the body supporting industry to adopt AI.

For organisations operating in Australia, this Plan sets the direction of travel for investment, regulation, workforce policy, and government procurement over the rest of this decade. While it does not itself create new legal obligations, it tells you where the law and regulators are heading, and how public funds will be deployed.

For a practical SME owner, this translates to three concrete implications:

• Funding and support programs are expanding. The National AI Centre is your first port of call for free guidance, tools, and connections to AI advisors designed specifically for smaller businesses.
• Government is becoming a major AI user. By 2030, AI adoption could lift public sector gross value added by 13%, delivering $19 billion in annual value. Businesses that supply to government or operate in regulated sectors should expect AI literacy to become a procurement expectation.
• Regulation is coming — but is not yet here for most SMEs. The Plan signals intent without yet creating binding obligations for most small businesses. This is your window to build good practices before they become legal requirements.

(For a plain-English breakdown of the government's current guidance framework, see our guide on [Responsible AI for Australian SMEs: Understanding the Government's Guidance for AI Adoption].)

Trend 3: Privacy Law Is Changing — and the December 2026 Deadline Is Real

Of all the trends in this article, this is the one with the hardest deadline. Australian privacy law has been updated in ways that will directly affect any business using AI to make decisions about customers or employees — and the clock is ticking.

From 10 December 2026, amendments introduced by the Privacy and Other Legislation Amendment Act 2024 (Cth) will commence, imposing new transparency obligations on entities regulated under the Privacy Act 1988 (Cth), particularly in relation to the use of automated decision-making involving personal information.

In plain English: these APP 1 amendments will require an APP entity to include certain information in their privacy policy where the entity has arranged for a computer program to use personal information to make a decision that could reasonably be expected to significantly affect the rights or interests of an individual.

What Decisions Are Covered?

The reforms focus on decisions that have a legal or similarly significant effect on individuals. In practice, this means decisions about employment (hiring, performance management, termination), access to credit or financial products, insurance coverage, housing, healthcare, and government services. If your AI system influences any of these outcomes, the proposed reforms apply to you.

This is broader than many business owners realise. An AI-powered recruitment screening tool, an automated credit assessment in a retail finance context, or an AI chatbot that quotes on insurance-adjacent products could all fall within scope.

The Three Steps You Need to Take Before December 2026

Businesses should audit their AI systems now to identify which processes involve automated or semi-automated decisions about individuals; review and update privacy policies to disclose AI use in plain language; assess data minimisation practices in AI training pipelines; and establish a process for individuals to request human review of significant AI-influenced decisions.

Beyond the December 2026 deadline, the broader regulatory direction is clear. The Senate AI Inquiry has recommended that Australia move towards mandatory guardrails for high-risk AI applications. The Privacy Act reforms, if enacted as proposed, will create binding obligations around automated decision-making and data minimisation that directly constrain how AI systems can be built and operated.

Waiting for comprehensive legislation before acting is itself a risk. Businesses that build AI governance practices now will be better positioned when mandatory frameworks arrive — and they will arrive.

(For a full walkthrough of your current privacy obligations when using AI tools, see our guide on [AI and Australian Privacy Law: What Every Business Owner Needs to Know].)

Trend 4: The First-Mover Window Is Closing — But It Hasn't Closed Yet

The most commercially important trend in this article is also the most difficult to quantify: the narrowing window for competitive differentiation through early AI adoption.

The data on Australian SME AI adoption tells a story with two distinct chapters. In the first chapter, most businesses are still experimenting. The National AI Readiness Index Report 2025 found that 76% of SMEs have yet to develop a clear AI strategy, even though 83% anticipate that AI will significantly impact their business within the next year. The report also revealed that 44% of respondents consider AI an urgent priority for their organisations.

In the second chapter — which is already beginning — the gap between AI adopters and non-adopters is becoming measurable in revenue terms. According to Salesforce research, 88% of Australian small and medium businesses using AI report stronger revenue growth, improved productivity, and enhanced customer experiences.

The Deloitte Access Economics report The AI Edge for Small Business, which surveyed more than 1,000 Australian SMBs across various industries, found that while two-thirds of SMBs are using AI, just 5% of surveyed SMBs using the technology are fully enabled to realise its potential benefits.

This gap between surface-level adoption and genuine capability is where the opportunity lies. The National AI Readiness Index Report 2025 segmented SMEs into four categories: 'Trailblazers' (17%) are leading with clear strategies focused on growth; 'White knucklers' (24%) are under pressure to act but hampered by complexity; 'Tinkerers' (36%) are experimenting without coordinated leadership; and 'Sleepwalkers' (23%) have minimal exposure, often in sectors like natural resources and public services.

If you're currently a Tinkerer — using AI in isolated, uncoordinated ways — the next 12 months represent your best opportunity to become a Trailblazer before the market normalises. For Australian SMBs, the window of early-adopter advantage is closing; AI is becoming the new baseline for competitive viability.

The Maturity Gap Is the Real Opportunity

Boosting artificial intelligence adoption among Australia's small to medium-sized businesses could turbo-charge profits and unlock a near $50 billion economic windfall, according to a Deloitte Access Economics report commissioned by Amazon and released in November 2025.

The report projects that SMEs will achieve productivity growth 22% faster than larger firms between 2025 and 2030, thanks to AI's accessibility and low capital requirements. This is the counterintuitive advantage of being small: you can move faster, implement more decisively, and realise returns sooner than a large enterprise navigating complex procurement and change management processes.

The competitive advantage of early adopters compounds over time. AI-adopting businesses respond to customer enquiries faster, personalise their marketing more effectively, make data-driven decisions with greater confidence, and operate more efficiently with leaner teams.

What Australian Business Owners Should Do Right Now

Based on these four trends, here is a practical framework for making decisions in the next 90 days:

Key Takeaways

• Agentic AI is arriving fast: Gartner predicts 40% of enterprise applications will be integrated with task-specific AI agents by the end of 2026 — and SME-accessible versions are already emerging in tools like Zapier, HubSpot, and customer service platforms.

• The National AI Plan is not just policy theatre: The Plan is a strategic roadmap showing where regulatory scrutiny, funding, and policy attention will intensify. Organisations that embed AI into their governance, legal, and commercial frameworks now will be best placed to capture emerging opportunities whilst managing risk.

• December 2026 is a hard deadline: From 10 December 2026, APP entities will have additional obligations to ensure their privacy policies contain specified information if they arrange for a computer program to use personal information to make decisions that could reasonably be expected to significantly affect the rights or interests of an individual.

• The adoption gap is real — but most SMEs are still at the surface: While two-thirds of Australian SMBs are using AI, just 5% are fully enabled to realise its potential benefits. Moving from surface-level use to embedded strategy is where competitive advantage is built.

• The window is open, but not indefinitely: Adopting AI now gives organisations a 6–12 month lead before mainstream adoption eliminates first-mover advantages. That window is measurable — and it is closing.

Conclusion

The trajectory of AI in Australian business is no longer speculative. The government has committed its most comprehensive AI strategy to date, privacy law has a hard enforcement date on the calendar, AI agents are moving from enterprise pilots to SME-accessible tools, and the gap between early adopters and the rest of the market is becoming visible in revenue and productivity data.

The complete journey from "what is AI?" to "where is AI going?" is the arc of this entire content cluster — and this article is its endpoint. But the most important insight isn't about technology at all. It's about timing. The businesses that will look back in 2027 and feel they got it right are the ones that stopped experimenting in isolation and started building AI into how they actually operate — not because they had all the answers, but because they understood the direction of travel and moved accordingly.

If you're still in the early stages of understanding what AI can do for your business, start with our [Plain-English Explainer for Australian Business Owners] and work through the cluster from there. If you're ready to act, our guides on [How to Implement Your First AI Tool] and [How to Calculate ROI Before You Spend a Dollar] will give you the practical frameworks to move with confidence.

References

• Australian Department of Industry, Science and Resources. "National AI Plan." industry.gov.au, December 2, 2025. https://www.industry.gov.au/publications/national-ai-plan

• Bird & Bird. "A New Era for AI Governance in Australia: What the National AI Plan Means for Industry." twobirds.com, December 9, 2025. https://www.twobirds.com/en/insights/2025/australia/a-new-era-for-ai-governance-in-australia-what-the-national-ai-plan-means-for-industry

• Austrade International. "Australia Launches National AI Plan to Build a World-Class AI Industry." international.austrade.gov.au, December 2025. https://international.austrade.gov.au/en/news-and-analysis/news/australia-launches-national-ai-plan-to-build-a-world-class-ai-industry

• MinterEllison. "Australia Introduces a National AI Plan: Four Things Leaders Need to Know." minterellison.com, December 2025. https://www.minterellison.com/articles/australia-introduces-a-national-ai-plan-four-things-leaders-need-to-know

• Australian Digital Government. "AI Plan for the Australian Public Service 2025: What We Plan to Achieve." digital.gov.au, November 2025. https://www.digital.gov.au/policy/ai/australian-public-service-ai-plan-2025/what-we-plan-achieve

• Gartner Inc. "Gartner Predicts 40% of Enterprise Apps Will Feature Task-Specific AI Agents by 2026." gartner.com, August 26, 2025. https://www.gartner.com/en/newsroom/press-releases/2025-08-26-gartner-predicts-40-percent-of-enterprise-apps-will-feature-task-specific-ai-agents-by-2026-up-from-less-than-5-percent-in-2025

• Gartner Inc. "Gartner Predicts Over 40% of Agentic AI Projects Will Be Canceled by End of 2027." gartner.com, June 25, 2025. https://www.gartner.com/en/newsroom/press-releases/2025-06-25-gartner-predicts-over-40-percent-of-agentic-ai-projects-will-be-canceled-by-end-of-2027

• Deloitte Access Economics / Amazon. "The AI Edge for Small Business." deloitte.com/au, November 25, 2025. https://www.deloitte.com/au/en/about/press-room/ai-edge-small-business-increased-smb-ai-adoption-can-add-44-billion-australias-economy-251125.html

• Decidr / Nature Research. "National AI Readiness Index Report 2025." Reported in cfotech.com.au, August 2025. https://cfotech.com.au/story/australian-smes-rush-into-ai-adoption-without-clear-strategies

• Office of the Australian Information Commissioner (OAIC). "Chapter 1: APP 1 — Open and Transparent Management of Personal Information." oaic.gov.au, updated October 3, 2025. https://www.oaic.gov.au/privacy/australian-privacy-principles/australian-privacy-principles-guidelines/chapter-1-app-1-open-and-transparent-management-of-personal-information

• ValiDATA. "AI and Australia's Privacy Act Reforms: What's Changing and Why It Matters." validata.ai, April 2026. https://www.validata.ai/post/ai-and-australia-s-privacy-act-reforms-what-s-changing-and-why-it-matters

• Jackson McDonald. "Complying with the New Transparency Requirements for Automated Decision-Making." jacmac.com.au, December 22, 2025. https://www.jacmac.com.au/insights/complying-with-the-new-transparency-requirements-for-automated-decision-making/

• FTI Consulting. "Australian Privacy Law Reforms Take Effect." fticonsulting.com, January 2026. https://www.fticonsulting.com/insights/articles/australian-privacy-law-reforms-take-effect

• IAPP. "Global AI Governance Law and Policy: Australia." iapp.org, 2025–2026. https://iapp.org/resources/article/global-ai-governance-australia

• NEXTDC. "Australia's AI Opportunity Report 2025: AI Data Centre Infrastructure." nextdc.com, February 3, 2026. https://www.nextdc.com/blog/australias-ai-opportunity-report-2025

• Deloitte Insights. "Agentic AI Strategy." deloitte.com, February 9, 2026. https://www.deloitte.com/us/en/insights/topics/technology-management/tech-trends/2026/agentic-ai-strategy.html

• IBM. "AI Agents in 2025: Expectations vs. Reality." ibm.com/think, November 18, 2025. https://www.ibm.com/think/insights/ai-agents-2025-expectations-vs-reality

• Salesforce Research. Cited in: "How Australian Small Businesses Are Using AI to Compete with Enterprise Brands in 2026." medium.com, December 2025.