Could Australia be left behind in the AI revolution?

First published by Macquarie University

Artificial Intelligence (AI) is reshaping the world, but while major global players are pouring billions into AI development, Australia risks being left behind. Without urgent investment in homegrown AI, the nation could become a country that merely pays other nations for cutting-edge technology rather than developing its own.

Professor Beheshti, Director of the Centre for Applied Artificial Intelligence at Macquarie University warns without a strong AI strategy, Australia will lag in innovation, economic growth and global competitiveness.

“For the first time in history, we’re creating something with the potential to surpass us,” he says. In his upcoming public lecture on March 20 — part of Macquarie University’s Discover series — he will discuss the evolution of intelligence, from human cognition to AI, and how these advancements can be harnessed for national progress.

Three pillars of AI

Professor Beheshti identifies three fundamental types of human intelligence that have shaped AI systems: analytical, cognitive and generative intelligence.

Analytical intelligence enables humans to understand the world and answer ‘what’ questions — such as recognising colours, shapes and numerical patterns, says Professor Beheshti. “Analytical AI mimics this by extracting knowledge from raw data, forming the backbone of many AI applications in business, medicine and science,” he says.

A thriving local AI sector requires strategic government investment to prevent companies from moving offshore.

Cognitive intelligence drives decision-making and answers ‘how’ questions — like planning a complex project or solving a problem. “AI systems leveraging cognitive intelligence are used by decision-making tools in industries like finance, healthcare and law enforcement, providing insights and recommendations based on data analysis,” says Professor Beheshti.

Generative intelligence fuels human creativity and innovation, building on analytical and cognitive intelligence. AI’s generative capabilities, seen in systems like ChatGPT, DALL-E, and GitHub Copilot, allow it to generate text, images, and even code.

“In my own lab, we developed ProcessGPT, a system to automate and optimise workflows across various industries by generating new process models and instances when and if needed,” he says.

However, to compete in AI innovation, a country needs more than just talent — it needs investment, Professor Beheshti says.

Australia’s AI investment gap

While various governments, including the US, Canada, and Europe, are injecting billions into AI infrastructure, Australia’s spending remains minuscule. The latest Federal Budget allocated only $39.9 million to AI, all directed toward regulation rather than development.

“Australia is essentially spending money to regulate AI advancements from other countries," says Professor Beheshti.

By contrast, Canada committed $2 billion to support AI research and industry growth. The US announced $500 billion in private-sector AI investment and Europe has launched a €200 billion initiative to lead AI innovation. The UAE is investing billions in AI literacy and education to future-proof its workforce.

The consequences of Australia’s limited AI infrastructure are already evident, he says. Research funds are increasingly spent on foreign cloud services, AI tools and licensing fees -  money that leaves Australia instead of fostering local AI ecosystems.

A closing window of opportunity

Australia has five years to establish itself as a competitive AI player, according to Professor Beheshti.

Unlike the US, where tech giants drive AI innovation, Australia lacks large private organisations capable of independently developing cutting-edge AI.

Government investment is focused on small and medium enterprises (SMEs), which often relocate overseas as they scale up due to limited domestic support, he says.

“A thriving local AI sector requires strategic government investment to prevent companies from moving offshore,” says Professor Beheshti.

“If we want to be at the forefront of AI, we need policies that encourage growth, attract AI talent and ensure that businesses can develop and remain in Australia.”

Job threat or future shaping?

Despite concerns that AI will replace jobs, Professor Beheshti argues AI enhances human capabilities rather than eliminating them. AI can serve as a powerful tool for industries, from healthcare to education, unlocking new levels of efficiency and creativity.

“AI will boost collective learning, where each generation builds upon the knowledge and skills of the previous one,” he says. “But without significant investment in AI infrastructure, Australia risks becoming merely a consumer of transformative technologies, not a leader in their development.”

The rapid rise of large language models like ChatGPT and DeepSeek, developed in the US and China, underscores this challenge. Australia has the expertise to develop its own AI models, but without the necessary funding and infrastructure, it remains dependent on foreign technology.

“With the right investment and support, Australia can shape the future of AI rather than relying on external developments.”

Professor Beheshti will deliver the first Discover public science lecture for 2025 on Thursday 20 March.