New Zealand's AI Adoption: A Comprehensive Analysis in 2025.

Key Highlights:

• New Zealand’s AI adoption surged in 2025, with 82-87% of businesses and 69% of consumers using AI tools for productivity, though trust remains a challenge. Major impacts include workforce augmentation (not replacement), strong operational efficiency gains (93-96% workers more efficient), and positive financial returns. The nation favors off-the-shelf AI solutions over custom builds, driving rapid deployment, especially among large enterprises.

• Consumer trust is lagging, only 34% trust AI. Regulatory gaps exist, but recent government strategies, increased investment, and coordinated industry and academic initiatives are steadily boosting public sector adoption. Māori engagement is progressing but still underrepresented.

• Key sectors leading adoption: transport, media, tech, and public services. Influential contributors are the NewZealand.AI, AI Forum NZ, NZTech, AUT Centre for AI Research, university institutes, Spark, Xero, Air NZ, and various government agencies.

• The article highlights actionable insights and strategic challenges around skills development, trust-building, infrastructure investment, and regulatory clarity.

• New Zealand is positioned for future AI success if it maintains momentum in business, government, and workforce transformation while addressing the trust and capability gaps.

New Zealand has undergone a remarkable transformation in artificial intelligence adoption throughout 2025, emerging as a surprising leader in business AI integration while grappling with consumer trust challenges.

The country's approach to AI, prioritising adoption over development, has delivered substantial productivity gains, though questions remain about long-term competitiveness against more aggressive AI development nations.

The State of AI in Aotearoa

New Zealand's AI landscape in 2025 reveals a nation in transition. Business adoption has surged dramatically, with 82-87% of organisations now using AI in some capacity, representing nearly a doubling from 48% in 2023.

I find this statistic surprising. I speak at conferences around New Zealand almost every week. I’m just not hearing evidence of AI being embedded into every day workflows as this might suggest. I clarify what these reports define as ‘adoption’ below. No doubt more than 80% of organisations have AI in the business tools they use everyday. Integration of AI Agents, Assistants and LLMs into daily tasks I think is much lower.

However, this rapid uptake has delivered tangible results: 93% of businesses report AI has made workers more efficient, far exceeding global averages and outpacing neighbouring Australia where only 42% of CEOs report similar efficiency gains.

However, this business enthusiasm contrasts sharply with consumer sentiment. While 69% of New Zealanders use AI regularly, only 34% trust the technology, and 44% believe AI risks outweigh the benefits. This trust deficit, combined with New Zealand's 40th place ranking in the Oxford Government AI Readiness Index, highlights the complex challenges facing the nation's AI ambitions.

Business Adoption: Leading the Pack

Dramatic Growth Trajectory

The pace of AI adoption in New Zealand businesses has been nothing short of exceptional. From a baseline of 48% in 2023, adoption jumped to 66-67% in 2024 and reached 82-87% by 2025. Among large enterprises with over 200 employees, adoption rates are even higher at 92%, indicating that scale provides both resources and incentives for AI integration.

This growth trajectory significantly outpaces international comparisons. Australia, despite its larger economy, reports only 50% of businesses regularly using AI, while New Zealand's adoption rate approaches that of Singapore's 70%+, despite Singapore's massive $27 billion AI investment and third-place global AI ranking.

Productivity and Financial Impact

The financial returns from AI adoption in New Zealand are substantial. 56% of businesses report positive financial impact from AI, with 71% achieving operational cost savings. These savings, combined with efficiency gains, have created a compelling business case for continued investment.

Productivity improvements are particularly striking, with 93-96% of workers reporting increased efficiency due to AI. This figure represents one of the highest reported efficiency gains globally and suggests that New Zealand businesses are successfully implementing AI in ways that augment rather than replace human capabilities.

Implementation Preferences and Costs

New Zealand businesses demonstrate a clear preference for pragmatic AI solutions. 72-73% use off-the-shelf AI tools like ChatGPT, Microsoft Copilot, and Google Gemini, while only 13% have invested in custom-built solutions. This preference reflects both cost considerations and the rapid availability of powerful generative AI tools that require minimal technical expertise.

Implementation costs have decreased significantly, with more businesses reporting setup costs under $5,000 compared to previous years. This cost reduction has democratized AI access, enabling smaller enterprises to experiment with AI without substantial upfront investment.

Workforce Transformation: Augmentation Over Replacement

Minimal Job Displacement

Despite widespread fears about AI-driven job losses, New Zealand's experience suggests a more nuanced reality. Only 7% of organizations report AI directly replacing workers, a figure that has remained stable across multiple surveys. However, 40% report reduced need for new hires, indicating that AI is reshaping workforce demand rather than causing mass unemployment.

This "sinking lid" approach, where businesses upskill existing employees rather than replacing departing staff—appears to be the dominant pattern. 81% of businesses now support internal and/or external AI training, demonstrating a strong commitment to workforce development.

New Opportunities and Skills Evolution

Paradoxically, while reducing some hiring needs, AI is simultaneously creating new opportunities. 62% of businesses report that AI is generating new career opportunities, a 13 percentage point increase from previous surveys. This suggests that AI is driving job evolution rather than elimination, creating demand for AI-literate workers across various sectors.

The skills gap remains significant, however. Only 36% of New Zealanders feel they have the skills and knowledge to use AI appropriately, and just 24% have received formal or informal AI training. This skills deficit represents both a challenge and an opportunity for New Zealand's future AI competitiveness.

Consumer Perspectives: The Trust Challenge

High Usage, Low Trust

New Zealand consumers present a fascinating paradox: high AI usage coupled with significant skepticism. 69% use AI regularly, yet only 34% are willing to trust AI. This trust deficit is more pronounced than in many other markets and represents a significant barrier to broader AI adoption.

The primary concerns are practical rather than theoretical. 59% report experiencing loss of human interaction and connection due to AI, while 75% are unsure online content can be trusted as it may be AI-generated. These concerns reflect real user experiences rather than abstract fears about AI's future impact.

Regulatory Expectations

New Zealanders demonstrate strong appetite for AI governance. 81% believe AI regulation is required, though only 6% are aware of current AI regulations and policies. This regulatory gap contributes to uncertainty and may explain some of the trust challenges facing AI adoption.

The demand for regulation is accompanied by specific expectations for accountability. 85% would be more willing to trust AI systems if there is assurance about their trustworthy use, including knowing who is accountable if issues arise. This suggests that clear governance frameworks could significantly improve public acceptance.

Government and Public Sector Progress

Policy Framework Development

New Zealand launched its first national AI strategy in July 2025, making it the last OECD country to develop such a framework. The strategy focuses on adoption rather than foundational AI development, acknowledging New Zealand's resource constraints while leveraging its agility and regulatory stability.

The public sector has shown rapid AI integration. The 2025 cross-agency AI survey recorded 272 AI use cases across 70 agencies, more than doubling from 108 cases across 37 agencies in 2024. 55 AI cases are now fully operational, up from just 15 in 2024, indicating genuine progress beyond pilot projects.

Investment and Infrastructure

Government investment in AI capabilities has increased substantially. Budget 2025 allocated $213 million for tuition and training subsidies and $64 million for STEM and priority skills, signaling recognition of the skills gap challenge.

The establishment of frameworks like the Public Service AI Framework and partnerships with organizations like Callaghan Innovation demonstrate a coordinated approach to AI governance and development.

International Comparisons: Strengths and Challenges

Competitive Position

New Zealand's AI adoption rates compare favorably internationally, particularly in business contexts. The 70% of New Zealand CEOs reporting AI workforce efficiency improvements versus 42% in Australia suggests superior implementation effectiveness, despite Australia's larger AI ecosystem and investment levels.

However, New Zealand faces significant challenges in other areas. The 40th place ranking in the Oxford Government AI Readiness Index reflects weaknesses in government preparedness, digital infrastructure, and innovation capacity. This ranking places New Zealand well behind AI leaders like Singapore (3rd globally) and raises questions about long-term competitiveness.

Regional Context

Within the Asia-Pacific region, New Zealand's position is mixed. While business adoption rates are strong, the country lacks the massive infrastructure investments seen in Singapore ($27 billion) or Australia's more developed AI startup ecosystem. Singapore's market is projected to grow from $1.05 billion to $4.64 billion by 2030, while New Zealand's much smaller market may struggle to achieve similar scale.

Trust and Cultural Factors

New Zealanders' cautious approach to AI contrasts with more aggressive adoption in markets like India, China, or even Singapore. This cultural preference for careful, ethical implementation may slow adoption in sensitive areas but could enable more sustainable, publicly acceptable AI integration over time.

Sector-Specific Adoption Patterns

Leading Industries

AI adoption varies significantly across sectors, with transport, postal and warehousing showing the highest uptake, followed by information, media and telecommunications, and public administration. Professional, scientific and technical services represent the largest single group of survey respondents at 32.6%, indicating strong adoption in knowledge work.

Arts and recreation show relatively low AI uptake, possibly reflecting the sector's emphasis on human creativity and the limited applicability of current AI tools to artistic expression.

Use Case Distribution

The top five AI use cases remain consistent across surveys: marketing, administration, software development, design, and project management. These areas benefit from AI's strength in processing digital information and automating routine tasks while presenting lower risks than sensitive applications like healthcare or finance.

Software development shows particularly high AI integration, with companies like Fraxional AI reporting 40-50% productivity improvements through AI-powered coding assistance. This aligns with global trends where development tools like GitHub Copilot have achieved widespread adoption.

Māori Perspectives and Inclusive Development

Engagement Levels

The inclusion of Māori perspectives in AI development represents both progress and ongoing challenges. 39% of businesses engage with Māori during AI design and development processes, exceeding initial expectations but still leaving the majority without meaningful Māori involvement.

Dr. Karaitiana Taiuru, Chair of the AI Forum's Kāhui Māori Atamai Iahiko, notes that while results are promising, most organizations still do not engage Māori at all. With the Māori economy estimated at $30 billion (8.4% of GDP) in 2023, and projections of 1.2 million Māori (20% of population) by 2040, this engagement gap represents both an ethical concern and a business opportunity.

Cultural and Economic Considerations

The emphasis on Māori engagement reflects New Zealand's unique constitutional framework under Te Tiriti o Waitangi. As AI becomes increasingly embedded in business and government processes, ensuring Māori voices are included in design decisions becomes crucial for both cultural appropriateness and commercial success.

Future Outlook and Strategic Implications

Competitive Positioning

New Zealand faces a critical juncture in its AI journey. The country has achieved impressive adoption rates and productivity gains, demonstrating that its focus on AI application rather than development can deliver results. However, the 40th place global ranking and significant trust challenges suggest vulnerabilities that could undermine long-term competitiveness.

The government's "adoption-first" strategy acknowledges economic realities—New Zealand cannot compete with the hundreds of millions invested in foundational AI development by tech giants. However, this approach requires excellence in implementation, governance, and skills development to maintain competitiveness with nations pursuing more aggressive AI strategies.

Critical Success Factors

Several factors will determine New Zealand's AI success:

Skills Development: The 24% AI training rate and 36% skills confidence represent significant constraints. Massive upskilling initiatives will be essential to capitalize on AI opportunities.

Trust Building: The 34% trust rate limits AI adoption in consumer-facing and sensitive applications. Clear governance frameworks and transparency measures could address these concerns.

Infrastructure Investment: While current adoption relies primarily on cloud-based AI services, ensuring adequate digital infrastructure remains crucial for future competitiveness.

Regulatory Clarity: The 81% demand for AI regulation coupled with 6% awareness of existing policies suggests need for clearer, more visible governance frameworks.

Conclusion: A Nation in Transition

New Zealand's AI story in 2025 is one of rapid business adoption, significant productivity gains, and emerging governance frameworks, tempered by consumer skepticism and international competitive pressures. The country has successfully leveraged its agility and pragmatic approach to achieve AI adoption rates that rival much larger economies.

However, the path forward requires addressing fundamental challenges: building public trust, closing skills gaps, and ensuring that adoption-focused strategies don't leave New Zealand dependent on foreign AI capabilities. The next phase of New Zealand's AI journey will determine whether the country can translate early adoption success into sustained competitive advantage in an increasingly AI-driven global economy.

The data from 2025 suggests New Zealand is well-positioned to succeed, but only if it can maintain momentum while addressing the underlying trust and capability challenges that could limit its AI potential. With 96% of workers reporting AI efficiency gains and a government finally committed to supportive policy frameworks, New Zealand has the foundation for AI success—now it must build upon it.

What is the definition of 'Adoption'?

in the context of the 2025 research and referenced reports, 'Adoption' of artificial intelligence is defined as the intentional use of AI tools, systems, or technologies within organizations or by individuals, measured by their integration into workplace functions, business processes, or routine consumer activities.

• For businesses, 'adoption' specifically means organizations have actively incorporated AI solutions—such as off-the-shelf platforms (e.g., Microsoft Copilot, ChatGPT), custom-built algorithms, or AI-powered software—into operations, management, and decision-making.

• It is measured by both direct IT implementation (having AI systems actively in use for tasks ranging from automation, data analysis, and customer service to software development and marketing) and by employees reporting that their workplace uses AI for improving efficiency or productivity.

• Surveys often ask respondents if their organization currently uses any AI applications or platforms and if those tools are impacting business outcomes, workforce efficiency, or financial performance.

• For consumers and employees, 'adoption' refers to regular and intentional engagement with AI-powered products or services, such as chatbots, voice assistants, recommendation engines, and productivity software. This also includes whether individuals feel their tasks or daily life involve AI-driven tools, either knowingly or through embedded technologies.

• In the public sector, adoption references the number of agencies and cases where AI is operational—such as workflow automation, data-driven decision support, predictive analytics, and citizen-facing digital services.

Key Criteria Used in Measurement

• Organizations reporting active AI usage in business processes.

• Employees intentionally using AI at work (not just having tools installed, but actually leveraging them for tasks).

• The number of formal AI use cases recognized in public service.

• The share of consumers using AI-powered digital services or features on a routine basis.

This definition emphasises real, day-to-day utilisation as the primary measure, simply having access to AI technology isn't considered actual adoption unless it's embedded in regular usage.

Which organisations, companies, initiatives, or programs have contributed or influenced the adoption of AI in New Zealand over the last 10 years?

The AUT Centre for Artificial Intelligence Research (CAIR), established in 2000, laid the earliest groundwork for AI research in New Zealand. Professor Albert Yeap's cognitive modeling work provided the academic foundation that would later influence practical applications. This was followed by the University of Auckland's NAOInstitute (2021), which takes a transdisciplinary approach to natural, artificial, and organizational intelligence research.

The AI Researchers Association (AIRA), founded in 2021, now coordinates over 480+ researchers across all eight New Zealand universities and Crown Research Institutes, creating the academic backbone supporting today's AI developments. The University of Waikato's AI Institute (2021) and UC AI Research Group (2022) have further strengthened the research ecosystem.

Industry Coordination and Advocacy

The AI Forum New Zealand, founded in 2017, has been the single most influential organization driving AI adoption nationwide. Starting from what felt like a "national vacuum," the Forum has grown to 144+ member organizations and produces the critical productivity reports that track New Zealand's AI progress. Their AI Blueprint (2024) became the foundation for government policy development.

NZTech and the Digital Technologies Industry Transformation Plan have provided broader industry coordination, while professional service firms like Deloitte, KPMG, and Datacom have delivered implementation support and market research.

NewZealand.AI, founded in 2017, has established itself as a go-to resource for connecting businesses, sharing AI adoption stories, and offering advisory services tailored for New Zealand's unique market needs.

• Workforce and Business Insights: The platform publishes regular workforce, market, and industry reports. These have shaped public understanding about skills gaps, practical use cases, and how Kiwi firms are deploying generative AI—providing real, actionable insights for business leaders.

• Events, Education & Advocacy: Through workshops, webinars, and collaborative initiatives with groups like the AI Forum and NZTech, NewZealand.AI has helped upskill thousands of business professionals. The site is often cited in government and industry policy discussions as a trusted voice urging practical action.

• Bridging Strategy and Implementation: NewZealand.AI is notable for translating global AI trends into relevant New Zealand context, making complex concepts accessible and supporting businesses from discovery to integration.

NewZealand.AI provides a central hub for knowledge-sharing, talent development, and practical support for the New Zealand AI ecosystem, all in ways the official government channels and academic programs simply can't replicate.

Corporate Pioneers and Early Adopters

Spark New Zealand began its AI journey in 2014 with machine learning experiments that evolved into the B.R.A.I.N platform by 2020. This marketing AI system achieved 10x improvement in campaign outcomes and positioned Spark as a leader in AI-driven customer experience. Their commitment extends to helping other businesses through the AI for Business Mini-MBA programme.

Xero, founded in Wellington in 2006, laid crucial cloud infrastructure foundations before launching major AI integration in 2023. Their JAX AI assistant (2024) represents one of the most successful small business AI applications globally, handling everything from invoice creation to financial forecasting.

Air New Zealand has been steadily building AI capabilities since launching the Oscar chatbot in 2016, progressing to computer vision AI trials in 2020, and culminating in their groundbreaking OpenAI partnership in 2025. This collaboration, deploying ChatGPT Enterprise to 3,500 employees, represents New Zealand's largest enterprise AI implementation.

Government Leadership and Policy Development

MBIE led the development of New Zealand's first AI Strategy launched in July 2025, making New Zealand the last OECD country to establish such a framework. The Government Chief Digital Officer (GCDO) coordinates public sector AI adoption through the Public Service AI Framework.

Callaghan Innovation delivers the AI Activator program, while the newly established New Zealand Institute for Advanced Technology (NZIAT) has committed $70 million over seven years for AI research and commercialization.

Stats NZ, as Government Chief Data Steward, ensures the data infrastructure necessary for AI development, while the cross-agency AI survey tracks government adoption progress.

International Partnerships and Technology Access

Microsoft New Zealand has been crucial in providing enterprise AI tools and conducting economic impact research, projecting $76 billion in GDP contribution by 2038. AWS provides cloud infrastructure and enterprise AI capabilities.

The Air New Zealand-OpenAI partnership represents the most significant international AI collaboration, giving New Zealand direct access to cutting-edge AI development. Tata Consultancy Services' five-year digital transformation partnership with Air New Zealand demonstrates how international expertise accelerates local AI capabilities.

Key Transformation Catalysts

Several factors created the conditions for New Zealand's AI revolution:

The Government's cloud-first policy (2012, refreshed 2023) established the digital infrastructure foundation that enabled rapid AI adoption. This policy precedent demonstrated how government leadership could drive technology transformation.

The COVID-19 pandemic accelerated digital transformation, creating both necessity and opportunity for AI adoption across all sectors.

The availability of accessible AI tools like ChatGPT from late 2022 democratized AI access, enabling the rapid adoption rates we see today.

Supporting Ecosystem Development

Organisations like Simply Privacy ensure responsible AI governance, while academyEX provides training and capability development. ElementX, Capability Collective, and Bright Think offer specialised AI implementation support.

The Digital Technologies Industry Transformation Plan provides strategic direction for the broader tech sector, while initiatives like Invest New Zealand create pathways for international AI investment.

Current State and Future Direction

This ecosystem has produced remarkable results, 82-87% business AI adoption in 2025, 96% of workers reporting efficiency gains, and positioning New Zealand ahead of much larger economies in practical AI implementation.

The combination of strong academic research, coordinated industry advocacy, government policy support, and corporate leadership has created a uniquely effective AI development environment. While New Zealand may be the smallest OECD country to develop an AI strategy, the collaborative approach between these organizations has delivered adoption rates that rival global leaders.

Looking ahead, the $70 million NZIAT investment, expanded university programs like AUT's new Data Science and AI Department, and continued corporate partnerships position New Zealand well for the next phase of AI development.

Next Steps

• Join New Zealand’s AI Academy at Learn.NewZealand.AI