Australian AI investment lags but ROI set to double by 2028

Australian business investment in artificial intelligence is trailing behind global counterparts, despite a positive outlook for return on investment within the next three years, according to findings from a new SAP report.

The SAP Value of AI Report, conducted by Oxford Economics, indicates that Australian organisations currently achieve a 15% return on their business AI investments, with an average ROI of USD $3.2 million on a typical spend of USD $19.1 million this year. Globally, the average AI spend is higher, with Chinese organisations leading at USD $42 million, and US firms allocating USD $37 million on average.

The research suggests that by 2028, AI is expected to deliver a 29% ROI in Australia, almost doubling current levels. This would translate to an average return of USD $8.2 million per organisation.

AI isn't what's next, it's here now and it's already delivering results. But doing AI well takes more than hype. Businesses investing strategically in people, data and AI are already unlocking measurable ROI. With nearly three quarters of organisations expecting returns within three years, the message is clear: this is only the beginning. AI will get smarter, faster and more transformative from here.

These comments were made by Angela Colantuono, President and Managing Director for SAP Australia and New Zealand.

Business uptake

The report notes that AI currently supports one-quarter of business tasks in Australia, a figure forecast to rise to 41% in two years. Nearly two-thirds (62%) of surveyed organisations see AI as effective in helping address organisational challenges and note benefits such as enhancing insight generation, decision-making, customer and prospect engagement, and improving time to value.

The majority of Australian respondents anticipate that AI will become integral to business processes, decision-making, and customer offerings by 2028, one year earlier than the global average. Only 3% of businesses said they do not see AI ever becoming a core operational component.

We're witnessing the biggest business transformation since the internet. The question isn't whether AI will transform your business, it's whether you'll lead that transformation or be transformed by your competitors.

Colantuono highlighted the scale of change facing Australian organisations.

Investment scale

Despite these developments, the study finds Australian business AI investment lags behind international peers, raising the risk that local organisations could be outpaced in the longer term. While Australian spending averages USD $19.1 million, Chinese firms average more than double that amount, while US firms are also far higher at USD $37 million.

This isn't just about technology, it's about competitive survival. Those that don't crack the AI code now risk being left behind for good. In addition to boosting revenue, AI is about building smarter operations and empowering people to focus on the work that matters.

Colantuono emphasised the strategic risk facing slower adopters.

AI agents and future returns

The report identifies agentic AI-intelligent, autonomous systems that can plan, act and collaborate on business processes-as a potential game changer. These systems are expected to deliver a 10% ROI, or around USD $3 million, for Australian businesses in the next two years. However, only 6% of respondents say their organisation is fully prepared for AI agents, though 75% recognise their potential for transformation.

Barriers to adoption

The research highlights alignment with business strategy as the most critical factor for AI ROI, but only 10% of Australian organisations invest in AI in a strategic, holistic way. Most take a piecemeal (46%) or departmental-led (32%) approach. While 64% report adequate data readiness, key departments such as legal (84%), finance (74%), and HR (67%) report not being prepared for AI implementation.

Insufficient AI skills also present a challenge, with 68% identifying this as a barrier to maximising ROI. Nonetheless, 73% of those surveyed said they are building AI into their workforce strategy by upskilling or reskilling existing staff.

Security concerns were also prominent, with three-quarters of organisations worried about "shadow AI", where unauthorised AI tools are used by employees. Sixty-nine percent reported such tools are used at least occasionally within their businesses.

When organisations take a strategic approach aligned with their long-term vision, building AI into the fabric of how they operate, it deters shadow AI use and elevates the most powerful competitive weapon at their disposal. Organisations with strategic AI adoption are seeing faster implementation across business functions and significantly higher returns, while future-proofing themselves to keep pace with rapid changes across the tech and business landscapes.

Colantuono concluded that a coordinated and strategic AI adoption enables faster results, higher business returns, and reduces the risks associated with unauthorised AI usage.

The SAP Value of AI Report surveyed 1,600 business leaders across eight countries, including 200 Australian executives from enterprise and mid-market companies.