Australian firms boost GenAI spending despite shadow AI risks

Australian businesses are increasing their investment in generative AI despite concerns around staff-driven adoption and the risks of shadow IT, according to new industry research. Nearly three quarters of local firms plan to raise their AI budgets over the next year, even as many grapple with challenges such as software misuse, lack of governance, and unreliable outputs.

Employee-driven uptake

Research showed a significant portion of GenAI adoption comes not from top-down strategy but from employees installing their own applications. In Australia, 40% of business leaders said their primary reason for further investment was that staff had already begun using GenAI tools independently, compared to 39% in the UK and 32% in France. These unauthorised deployments, often referred to as 'shadow AI' or 'bring your own software' (BYOS), raise data privacy and compliance concerns.

Implementation challenges

Companies noted several obstacles in implementing GenAI. A third of respondents cited training as their biggest challenge, followed by 26% who faced problems integrating AI with existing systems. Other issues included staff misuse (23%), improper governance (29%), high costs (17%), and so-called AI hallucinations-when systems provide incorrect information (16%).

Supplementary tools

The research indicated that Australia's businesses often turn to additional technologies to maximise AI value. Over 90% of companies reported improved results after augmenting GenAI with tools such as Document AI (37%), Process Intelligence (31%), and retrieval augmented generation (19%). Benefits included more consistent outputs and smoother integration with existing workflows (45%), improved cost efficiency (43%), increased trust (40%), and more reliable results (38%).

Staff perceptions

Australian employees remain largely optimistic about GenAI. Eighty-five percent of business leaders reported positive results, with half noting the technology helped reduce workloads and fostered creativity. A further 43% said it made staff appear more professional. Nineteen percent of workers want GenAI systems to acknowledge when they do not know an answer, a figure higher than in both the UK and Germany.

Budget trends

Nearly all Australian companies expect to increase their GenAI budgets over the coming year, although most anticipate modest growth. Sixty-eight percent forecast increases of up to 20%, reflecting a cautious yet optimistic approach. Cost remains a barrier for some, however, with 17% of companies describing AI implementation as too expensive.

Corporate risk management

"GenAI is creating remarkable opportunities to reimagine how work gets done, which is rightfully generating a great deal of excitement, " said Ulf Persson, CEO, ABBYY. "However, shadow AI, when individuals use commonly available tools like ChatGPT, Grok, or Perplexity without oversight at work, potentially raises serious data privacy and compliance concerns. The corporate benefits of GenAI's potential are truly unlocked when leaders drive secure, strategic adoption with risk management as a priority."

Australian business leaders indicated that their organisations are increasingly looking at pre-trained and purpose-built AI solutions to overcome difficulties with bespoke model training. Sectors including fast food have reported productivity gains such as improved data extraction through the adoption of document AI technologies.