Australia positioned for $18.8bn AI economy by 2035
Microsoft and Mandala Partners have unveiled a report focusing on Australia's position and potential in the burgeoning global AI economy.
The report, titled 'Australia's Opportunity in the New AI Economy', explores the country's potential to become a key player in the new global AI economy, driven by advancements in generative AI. It pinpointed applications, AI datacentres, and data as major growth areas, predicting these sectors could compose 90 per cent of an anticipated AUD $18.8 billion in annual revenue by 2035.
Industry and government are advised in the report to take certain targeted actions to seize these opportunities. These include nurturing local startups, securing renewable energy sources, and bolstering the development of an AI-ready workforce. Addressing AI-associated risks such as bias, misuse, unpredictability, digital exclusion, and security are also critical.
Steven Worrall, Managing Director at Microsoft Australia and New Zealand, stated, "Australia has a solid foundation for AI, with its favourable business environment, strong sustainability credentials and high level of AI readiness all being among the country's key strengths." He added, "We're excited to be partnering with startups, datacentre companies and other business and government organisations to unlock the significant opportunities outlined in this report."
Worrall further emphasised Microsoft's commitment to assisting governmental regulation that balances AI opportunities with managing risks. "Together, I'm confident we can build a strong and safe AI economy to drive economic growth that benefits everyone," he said.
Australia's ability to achieve national priorities like improving digital resilience, creating export markets, and enhancing global interoperability depends heavily on strategic investments in AI. Achieving a robust AI economy could help deliver swift generative AI adoption across numerous sectors, potentially generating an estimated AUD $115 billion in annual economic value by 2030.
Damian Kassabgi, CEO of the Tech Council of Australia, commented, "The insights from this report reveal the critical role AI can play in enhancing Australia's economic and digital landscape. We are poised to lead, provided we continue to innovate and scale up our AI capabilities strategically."
The report indicates that by 2035, applications developed both domestically and internationally within Australian operations may yield AUD $10.6 billion in annual revenue. Australia's thriving startup ecosystem, underpinned by venture capital, presents further opportunities in AI applications development.
Wendell Keuneman, General Partner at Tidal Ventures, remarked, "This report reaffirms that Australia has a real opportunity to drive growth and build globally relevant AI businesses – particularly through applications, data and infrastructure. At Tidal, we're already backing the next generation of local founders building AI-first applications."
AI datacentres are highlighted as a vital component, with the potential to generate AUD $4.7 billion annually by 2035. Australia's strategic advantages, such as renewable energy and proximity to Asia, are seen as crucial for datacentre development.
Amit Singh, Managing Partner at Mandala, noted, "The opportunities and actions outlined in this report give Australia a clear roadmap to follow. From supporting the sustainable development of AI datacentres to growing AI talent locally, the right steps today can ensure that this new technology develops in a way that fosters a strong, new local sector."
The data aspect of AI involves datasets and advisory services set to produce AUD $1.7 billion in annual revenue by 2035. The report underscores the necessity for secure and easily accessible data for AI systems, reflecting Australia's capability enhancements in healthcare and other industries via AI.
