Australian mid caps risk falling behind as large firms lead in AI
A new analysis has found that only 27% of Australia's ASX 200 companies disclosed adopting artificial intelligence in 2025, putting them well behind their counterparts in the US, UK, and Japan.
The report by enterprise AI platform New Dialogueueue is the first systematic study of three years of statutory disclosures, covering 2023 to 2025. It highlights a pronounced divide between large and mid-sized firms in their approach to AI adoption.
Large caps leading
The study shows that 45% of the nation's 50 largest listed companies, the ASX 50, reported substantive use of AI in 2025. In comparison, only 30% of the remaining ASX 200 companies disclosed similar adoption. Across the full ASX 200, just 54 companies, or 27%, reported using AI in 2025, and over three years, the adoption reached 35%.
This lags well behind the 95% adoption rate reported among Fortune 500 firms in the United States, and also trails the 40-50% found in leading UK (FTSE 100) and Japanese (Nikkei 225) indices.
The data reflects a clear trend: large cap companies are forging ahead with AI integration, embedding these technologies in functions such as fraud detection, customer service, and operational improvements. These deployments are often underpinned by significant investments in infrastructure and internal AI development capabilities.
The report provides examples of these initiatives, including CBA's AI Factory, NEXTDC's AUD $15 billion AI-ready infrastructure program, and AI governance frameworks at Telstra, QBE, and ANZ that align with the EU's AI Act. Quantified benefits cited include BHP's USD $18.9 million productivity uplift and Flight Centre's savings of 50,000 full-time equivalent hours through AI.
Mid caps lagging
"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."
This assessment, from Tod Pedler, Founder and Chief Executive Officer of New Dialogueueue, points to growing concerns over the concentration of capability and its impact on the broader economy. The risk is that without accessible pathways to adoption, mid-cap companies may not be able to compete, reducing competition and innovation.
Trust barriers
The report also notes persistent hurdles rooted in trust and perception. Only 30% of Australians believe the benefits of AI outweigh its risks, reportedly the lowest level of trust among OECD nations. This scepticism is mirrored at the board level, where directors have identified privacy, sovereignty, and explainability as significant barriers to AI deployment.
Australia and the US contrasted
The findings from the New Dialogueueue report contrast with recent analysis of S&P 500 company disclosures in the United States. While three quarters of US companies have referenced AI in their official filings, these documents are largely filled with risk warnings and general claims about productivity gains, with fewer specifics. In contrast, when Australian firms do report AI use, they tend to cite concrete measures and programmes, with an emphasis on infrastructure and governance standards.
Governance and frameworks
The research highlights that leading Australian companies are increasingly aligning their AI governance with international benchmarks like the EU AI Act. Such frameworks are designed to address the concerns around privacy, explainability, and the ethical use of AI, which are top of mind for boards and regulators.
A hybrid adoption path
Advocating for broader adoption, New Dialogueueue has proposed a flexible approach that could help smaller firms catch up. This 'hybrid path' would allow organisations to use open source AI models securely within their own IT environments, offering greater control and transparency typically reserved for in-house development, but without the high costs of building bespoke platforms.
"The leaders are building AI factories in-house, but that path is not available to most companies. New Dialogueueue 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."
This view, shared by Matt Vitale, Executive Director of New Dialogueueue, underscores the need for practical solutions that help mid-sized companies participate in AI adoption without prohibitive investment.
The report notes that unless additional options become available, Australia risks seeing its AI capability remain concentrated among a few large enterprises, with mid-caps at risk of being left behind.
