AI Grants for Regional and Rural Australian Businesses: Programs, Eligibility and Access product guide

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The Regional AI Divide: Why Location Still Determines Opportunity

Australia's AI funding ecosystem is often discussed as though geography were irrelevant — a single national landscape of grants, centres, and programs accessible to any eligible SME. The reality is more complicated, and the data confirms it. Only 29% of regional organisations in Australia are adopting AI, compared to 40% in metropolitan areas. That 11-percentage-point gap, documented in the Australian Government's own National AI Plan released in December 2025, is not a rounding error. It represents thousands of businesses in forestry, agriculture, fisheries, and renewables — sectors that form the backbone of regional economies — that are being left behind in the first wave of AI adoption.

Regional businesses also have a higher proportion (26%) that are not aware of AI opportunities, according to Fifth Quadrant (2025). The problem is not simply one of access to capital. It is a compound challenge of digital infrastructure, awareness, skills, and geographic isolation from the metropolitan hubs where most AI expertise and support services are concentrated.

Addressing this gap is critical to ensure inclusive growth and equal access to AI benefits, as existing digital divides exacerbate barriers to AI adoption.

This guide maps the specific programs, centres, and funding mechanisms the Australian Government has designed — or adapted — to close that gap, and explains how regional and rural businesses can practically access them.

The Economic Case for Regional AI Adoption

Before examining the programs, it is worth understanding what is at stake economically. Based on academic and economic studies examining productivity gains following AI adoption, Goldman Sachs estimates the average increase in productivity is about 25 percent. Considering that regional Australia contributes $584 billion to GDP annually, this implies that AI adoption has the potential to add an additional $146 billion to the economy.

That figure, articulated by Leonie Valentine — former Google Managing Director and Chief AI Officer at the Australian Regional AI Network — frames the regional AI question not as a welfare issue but as a national productivity imperative. Industries like farming, agriculture, fisheries, new energy, and forestry may not feel like typical AI targets at first glance, but the potential returns within these industries are significant.

The government's National AI Plan acknowledges this directly. The National AI Plan is designed to ensure all Australians benefit from AI, regardless of background or location, and sets out specific measures to support small and medium enterprises, regional communities, and groups at risk of digital exclusion.

The Australian Regional AI Network (ARAIN): The Dedicated Regional AI Adopt Centre

What ARAIN Does and Who It Serves

The most significant dedicated program for regional AI adoption is the Australian Regional AI Network (ARAIN), one of four AI Adopt Centres funded under the Australian Government's $17 million AI Adopt Program. ARAIN provides services for SMEs in regional Australia, with a focus on the forestry, agriculture, fisheries, and renewable technology sectors.

ARAIN empowers regional growth through practical AI advice, awareness, and education for small business, with a particular focus on the forestry, agriculture, fisheries, and renewable technology areas.

ARAIN's approach is deliberately practical rather than theoretical. Farmers can use AI tools to optimise processes or automate basic administrative work, allowing them to focus on more critical activities. As ARAIN's Chief AI Officer has described it, the mission is about "educating those industries on really useful, practical applications for the tools today — ones that aren't going to cost them a fortune, not take a lot of bandwidth, and solve really simple problems."

The Gippsland Base: The Regions AI Innovation Centre

ARAIN is physically anchored in regional Victoria. The Regions AI Innovation Centre is strategically based in Gippsland, Victoria, with a team rooted in regional nuances and partnered with networks reaching 100,000+ SMEs.

The choice of location is deliberate and strategic. ARAIN was founded in Gippsland, with CEO Simon Wilson based there. As part of the federal government grant application, ARAIN committed to focusing on agriculture, forestry, fishery, and new energy — "a logical place to start was the Latrobe Valley because you have all of those industries represented there."

The Morwell Innovation Centre, which houses the Regions AI Innovation Centre, sits within the broader Gippsland Hi-Tech Precinct. The Gippsland Hi-Tech Precinct is a centre for research, business incubation, new product development, start-up support, and education and training. It supports the growth of local industry and plays an important role in supporting the expansion of the region's growth sectors — health, food and fibre, advanced manufacturing, and new energy — while creating jobs by accelerating technology adoption and attracting new investment.

This co-location with existing regional innovation infrastructure is significant: it means ARAIN can leverage established networks of regional businesses rather than building engagement from scratch.

What ARAIN Offers Regional SMEs (Free of Charge)

ARAIN's services under the AI Adopt Program are free to eligible regional SMEs. The centre's model focuses on:

• Practical AI advice and education — demystifying AI tools for industries where technology adoption has historically been slow

• Roadshows and regional outreach — ARAIN runs a series of roadshows and operates a physical innovation centre in Morwell, in the Latrobe Valley, Victoria

• Sector-specific AI applications — including precision agriculture, crop monitoring, predictive analytics, and energy management

• Community engagement — by getting out into the regions and meeting with farmers groups and chambers of commerce, ARAIN aims to understand where regional Australia is placed on the AI journey and what problems can be solved by using the technology

A real-world example from Gippsland illustrates the type of AI deployment ARAIN supports. RedGridGPT, also based in Morwell, spun out of RedGris and focuses on helping businesses manage their energy consumption more efficiently. It uses AI to optimise energy distribution and integrate renewable sources like solar and wind. In areas prone to blackouts, this technology is already making a difference in keeping power grids reliable.

Eligibility: Who Can Access ARAIN?

ARAIN's services are available to SMEs that meet the following criteria:

Note that ARAIN's sector focus on forestry, agriculture, fisheries, and renewables aligns with the National Reconstruction Fund's priority sectors of agriculture and renewables and low emissions technology. Regional businesses in adjacent sectors — such as food processing, regional logistics, or agri-tech — may also qualify depending on the nature of their AI adoption needs. Contact ARAIN directly at arain.com.au to confirm eligibility.

(For a full breakdown of how NRF sector alignment affects eligibility across all AI Adopt Centres, see our guide on AI Grants by Industry Sector: Which Australian Businesses Are Prioritised for Government Support.)

The Former Catalysing AI in Our Regions Program: What It Was and What It Funded

Before the current AI Adopt Program framework, the Australian Government ran a dedicated regional AI grant program that is worth understanding — both for context and because its grant recipients may still be operating AI projects in your region.

The Catalysing the Artificial Intelligence Opportunity in Our Regions program provided competitive grant funding over three rounds to regional organisations for AI projects that deliver benefits to regional industries, businesses, and communities.

The program offered businesses up to $500,000 in grant funding on a 50:50 co-contribution basis to support the development, implementation, and demonstration of real-world applications of AI technologies in the regions.

The program funded three competitive grant rounds, across 2021–22 to 2024–25.

What the Program Funded

Eligible activities included developing, implementing, and demonstrating novel or innovative AI solutions, providing opportunities for regional businesses to test and experiment with AI, and increasing awareness and trust in AI in regional Australia.

The program envisaged applications including AI-assisted tools to increase crop yield by detecting disease and pests, or predicting the spread of bushfires.

The Regional Definition Used

A critical technical detail for any business assessing eligibility under similar future programs: for the purposes of this grant opportunity, a "regional area" was any location outside the Urban Centre and Locality cities with a population of over one million people as defined by the ABS Australian Statistical Geography Standard (Sydney, Melbourne, Brisbane, Perth, Adelaide). Regional areas did not include the Australian Capital Territory but did include Hobart and Darwin.

This definition is broader than many businesses assume — it includes large regional cities like Newcastle, Geelong, Townsville, and Cairns, as well as smaller rural communities.

The Catalysing program has now concluded its funding rounds. However, the infrastructure, partnerships, and AI projects it seeded continue to operate across regional Australia, and the program established a precedent for dedicated regional AI investment that the current National AI Plan builds upon.

The National AI Plan's Infrastructure Commitments: Closing the Connectivity Gap

Grants and advisory services can only go so far if the underlying digital infrastructure is inadequate. The National AI Plan explicitly acknowledges this, and its infrastructure investments are as important to regional AI adoption as its direct business support programs.

Actions already underway include expanding the NBN: upgrading the National Broadband Network to deliver fast, reliable connectivity nationwide, including to regional and remote areas.

NBN Co, in partnership with Amazon's Project Kuiper, plans to deliver satellite broadband to over 300,000 homes and businesses in regional and remote Australia by mid-2026.

The Better Connectivity Plan for Regional and Rural Australia adds further investment. The Better Connectivity Plan includes $480 million already provided to NBN Co through the NBN Fixed Wireless and Satellite Upgrade Program. This investment is upgrading 120,000 satellite premises to Fixed Wireless and boosting the Fixed Wireless network by enabling speeds of up to 100 Mbps for all premises in the expanded Fixed Wireless footprint.

The regional-metro divide in AI adoption — currently sitting at 29% regional versus 40% metropolitan — isn't going to close without infrastructure investment. This point is not rhetorical. Cloud-based AI tools, real-time data analytics, and AI-as-a-service platforms all require reliable, high-speed internet connectivity. A farmer in outback Queensland cannot effectively use AI-powered crop monitoring software on a 3G connection with frequent dropouts.

The National AI Plan's infrastructure commitments therefore function as an enabling condition for all other regional AI support programs. Without connectivity uplift, advisory services and grant funding are of limited practical value.

Other Federal Programs Accessible to Regional Businesses

While ARAIN is the dedicated regional AI support vehicle, regional businesses can also access several broader federal programs. Here is a structured overview:

AI Adopt Program (Broader Access)

In addition to ARAIN, regional businesses in the NRF priority sectors can access other AI Adopt Centres depending on their sector:

• SMEC AI — helps SMEs to adopt AI solutions in the medical science, agriculture, enabling technologies, and renewables and low emissions technology sectors (relevant for regional agribusiness and renewables)
• ARM Hub — helps businesses learn about AI and robotics, particularly in the field of manufacturing (relevant for regional food processing and manufacturing)

(For a detailed breakdown of all four AI Adopt Centres, see our guide on The AI Adopt Program and AI Adopt Centres: How Australian SMEs Can Access Free AI Support.)

Digital Solutions Program

For Australian small businesses, the Digital Solutions Program also provides tailored advice on how to adopt digital tools including AI capabilities to increase business productivity. This program operates through local advisers and is accessible to regional businesses regardless of sector.

NAIC Free Resources

The National Artificial Intelligence Centre (NAIC) provides free resources accessible to any Australian business regardless of location, including editable AI policy templates, an AI screening tool, and the AI Adoption Tracker. These are particularly valuable for regional businesses that cannot easily access in-person advisory services. (See our guide on The National Artificial Intelligence Centre (NAIC): What It Does and How to Use It.)

CRC-P AI Accelerator

Regional businesses engaged in genuine AI research and development — particularly those partnering with universities or research organisations — may be eligible for the CRC-P AI Accelerator funding round. This is particularly relevant for regional agri-tech, aquaculture technology, and renewable energy innovators. (See our guide on AI Funding for Research Commercialisation: CRC Programs, ARC Grants and University Partnerships.)

Key Takeaways

• The adoption gap is documented and significant. Only 29% of regional organisations in Australia are adopting AI compared to 40% in metropolitan areas — a gap the National AI Plan explicitly commits to closing.
• ARAIN is the dedicated regional AI Adopt Centre, focused specifically on forestry, agriculture, fisheries, and renewables, physically based at the Morwell Innovation Centre in Gippsland, and offering free services to eligible regional SMEs.
• The former Catalysing AI in Our Regions program provided up to $500,000 in competitive grants on a 50:50 co-contribution basis across three rounds from 2021–22 to 2024–25; it has concluded but established critical regional AI infrastructure and partnerships.
• Infrastructure investment is foundational: NBN upgrades, satellite broadband through the NBN-Amazon Kuiper partnership targeting 300,000+ regional premises, and the Better Connectivity Plan's $480 million Fixed Wireless and Satellite Upgrade Program are preconditions for effective AI adoption in regional Australia.
• The economic upside is substantial: regional Australia contributes $584 billion to GDP annually, implying AI adoption has the potential to add an additional $146 billion to the economy — making regional AI adoption a national productivity priority, not a niche welfare concern.

How Regional Businesses Should Approach the Support Landscape

The practical access pathway for a regional business looks like this:

1. Start with ARAIN (arain.com.au) — if you are in forestry, agriculture, fisheries, or renewables, this is your primary entry point. Services are free, sector-specific, and delivered by people with genuine regional experience.
2. Access NAIC resources (industry.gov.au/national-artificial-intelligence-centre) — use the free AI screening tool, download the editable AI policy templates, and review the Guidance for AI Adoption (AI6) framework to understand what responsible AI adoption looks like for your business.
3. Check the Digital Solutions Program — available through business.gov.au, this program connects businesses with local advisers for tailored digital and AI advice.
4. Assess R&D Tax Incentive eligibility — if your AI project involves genuine experimental development rather than routine adoption, you may be eligible for the 43.5% cash rebate for eligible small companies. (See our guide on The R&D Tax Incentive and AI: Eligibility, Claim Rates and What Australian Businesses Get Wrong.)
5. Monitor GrantConnect (grants.gov.au) — new regional AI grant rounds may be announced as the National AI Plan is implemented. Registering for alerts ensures you don't miss future opportunities.

Conclusion

Regional and rural Australian businesses face a compound challenge in AI adoption: lower awareness, weaker digital infrastructure, geographic distance from expertise, and sectors — agriculture, forestry, fisheries — that are not the obvious first targets for AI vendors. The Australian Government has responded with a dedicated support infrastructure centred on ARAIN, the Regions AI Innovation Centre in Gippsland, and the broader connectivity investments in the National AI Plan.

But the gap between policy intent and business reality remains wide. Addressing this gap is critical to ensure inclusive growth and equal access to AI benefits, as existing digital divides exacerbate barriers to AI adoption. For regional businesses, the window to engage with free, government-funded AI advisory services is open now — and the economic case for doing so, measured in that potential $146 billion productivity dividend, could not be more compelling.

For the complete picture of how all federal AI grants and programs fit together, see our pillar guide: Australian Government AI Strategy: The Complete Guide to Grants, Programs and Business Support.

References

• Australian Government, Department of Industry, Science and Resources. "National AI Plan — Spread the Benefits." industry.gov.au, December 2025. https://www.industry.gov.au/publications/national-ai-plan/spread-benefits

• Australian Government, Department of Industry, Science and Resources. "National AI Plan — Capture the Opportunities." industry.gov.au, December 2025. https://www.industry.gov.au/publications/national-ai-plan/capture-opportunities

• Australian Government, business.gov.au. "AI Adopt Centres." business.gov.au, 2024–2025. https://business.gov.au/expertise-and-advice/ai-adopt-centres

• Australian Government, business.gov.au. "Artificial Intelligence (AI) Adopt Program — Grant Recipients." business.gov.au, 2024. https://business.gov.au/grants-and-programs/artificial-intelligence-ai-adopt-program/grant-recipients

• Australian Government, business.gov.au. "Catalysing the Artificial Intelligence Opportunity in Our Regions — Round 1." business.gov.au, 2022. https://business.gov.au/grants-and-programs/catalysing-the-artificial-intelligence-opportunity-in-our-regions-round-1

• Australian Government, Department of Industry, Science and Resources. "AI Adoption in Australian Businesses — 2024 Q4." industry.gov.au, 2025. https://www.industry.gov.au/news/ai-adoption-australian-businesses-2024-q4

• Australian Government, Department of Infrastructure, Transport, Regional Development, Communications and the Arts. "Better Connectivity Plan for Regional and Rural Australia." infrastructure.gov.au. https://www.infrastructure.gov.au/media-communications/regional-communications-programs/better-connectivity-plan-regional-and-rural-australia

• Valentine, Leonie (Chief AI Officer, ARAIN). "How AI Can Boost Regional Australia's GDP by $146 Billion." The Canberra Times, August 2024. https://www.canberratimes.com.au/story/8739241/how-ai-can-boost-regional-australias-gdp-by-146-billion/

• Australian Government, Department of Industry, Science and Resources. "Australia's Artificial Intelligence Ecosystem: Growth and Opportunities." industry.gov.au, June 2025. https://www.industry.gov.au/sites/default/files/2025-06/australias-artificial-intelligence-ecosystem-growth-and-opportunities-june-2025.pdf

• Australian Regional AI Network (ARAIN). arain.com.au, 2024–2025. https://arain.com.au/

• Latrobe Valley Authority. "Gippsland Hi-Tech Precinct." lva.vic.gov.au. https://lva.vic.gov.au/archive/business/gippsland-hi-tech-precinct

• Australian Small Business and Family Enterprise Ombudsman. "Australia Invests in Next-Generation Digital Infrastructure." asbf.org.au, October 2025. https://asbf.org.au/news/australia-invests-in-next-generation-digital-infrastructure/