Australia’s AI adoption splits into two-speed market, New Dialogue urges mid-caps to close the gap

Melbourne, 26 September 2025 - A new report from enterprise AI platform New Dialogue has revealed a widening divide in the way Australia’s top companies are adopting artificial intelligence.

The three-year study of ASX 200 annual reports shows that while 45% of ASX 50 companies disclosed substantive AI use in 2025, only 30% of the remainder of the ASX 200 did so. Overall, just 27% of ASX 200 companies disclosed AI adoption in 2025, well behind the 95% adoption rate in the Fortune 500 and nearly half of companies in the UK and Japan.

Large caps pull ahead, mid caps risk being left behind
Big players are embedding AI into fraud detection, customer service, and operations, supported by billion dollar infrastructure and in-house AI studios. The report warns that if mid caps cannot adopt at pace, capability will concentrate in a small group of giants, stifling competition and economic dynamism.

Trust remains a barrier
Only 30% of Australians believe AI’s benefits outweigh the risks, the lowest in the OECD. This scepticism is reflected in boardrooms, where directors flag privacy, sovereignty, and explainability as barriers to adoption.

Australia versus the US
The findings stand in contrast to a recent Financial Times analysis of S&P 500 disclosures. In the US, three quarters of companies now talk about AI, but filings are dominated by risk warnings and vague productivity claims. In Australia, fewer companies disclose AI, but those that do point to concrete initiatives such as CBA’s AI Factory, NEXTDC’s $15bn AI ready infrastructure program, and governance frameworks at Telstra, QBE, and ANZ aligned to the EU AI Act.

A hybrid path to adoption
New Dialogue is advocating for a “hybrid path”, enabling organisations to deploy open source models securely within their own environment. This combines the control and transparency of in-house development with the speed and affordability of enterprise software.

Quotes

Tod Pedler, Founder and CEO of New Dialogue:
“Australia’s AI adoption is splitting into a two-speed market. Large cap leaders are embedding AI across their businesses, but mid cap companies are struggling to keep pace. If this divide widens, capability will concentrate in a small group of giants, with negative consequences for competition and innovation.”

Matt Vitale, Executive Director of New Dialogue:
“The leaders are building AI factories in-house, but that path is not available to most companies. New Dialogue offers a hybrid alternative, letting firms run open source models in their own secure environment, with sovereignty, explainability, and control, without the billion dollar build. It is how mid caps can close the gap and compete with confidence.”

About New Dialogue
New Dialogue is an Australian founded enterprise AI platform built to give organisations sovereign control over their data and models. It enables regulated industries to deploy large language models securely, with explainability, auditability, and fixed fee pricing.