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Real competitive AI advantage is not being first, but being trusted enough to drive adoption, scale and lasting value.
In brief
- AI adoption is accelerating faster than governance capability, with only 12% of C-suite leaders able to correctly match AI risks to appropriate controls.
- Organisations are increasingly enabling citizen developers to build AI tools, yet many lack visibility into what is being created, exposing governance and risk management gaps.
In a global trust desert, Australia has a strategic advantage. We’ve built trusted systems and earned our reputation as a safe haven for capital. That same capability can position Australia as a global leader of responsible AI. But only if business leaders step up.
Two-thirds of organisations already allow citizen developers to build AI tools, while half admit they lack visibility over what’s being built. And 98% of surveyed companies report financial losses linked to AI-related risks, with an average loss of around US$4.2 million.
The latest EY Responsible AI Pulse Survey finds eight in 10 organisations are already achieving productivity gains from AI. But just 12% of C-suite leaders can correctly match AI risks to controls.
In one line, this tells us that we are scaling AI faster than we are capable of governing it.
Meanwhile, the 2025 EY AI Sentiment Index found Australians to be among the least trusting people globally. Just 37% believe the benefits of AI outweigh the risks.
These signals suggest that AI adoption is outpacing leadership capability.
A country’s or a company’s edge will not come from using AI. It will come from using it responsibly. And in this, we start from a position of strength.
Australia is already a global safe haven for capital.. Capital flows because Australia looks boring in the best possible way: a stable democracy, independent institutions, predictable regulation and sound economic fundamentals. We rank highly on global benchmarks, whether that’s capital confidence or financial system strength, or rule of law, because we’ve built systems that people trust.
The Australian government launched its first National AI Plan in December 2025. This is more a letter of intent than a comprehensive strategy, but it tells the market that AI is now a critical national capability.
Importantly, the National AI Plan doesn’t seek to ban AI or smother innovation. Instead, it commits to “responsible innovation” and to building “robust legal, regulatory and ethical frameworks that protect rights and build trust”, including through an AI Safety Institute.
The Victorian government has pushed this further, releasing an AI mission statement in January 2026 that positions Victoria as the “AI capital of Australia”. This sends a clear message to business leaders: governments are not waiting for organisations to “figure this out later.” The bar is moving whether businesses are ready or not.
These should be confidence-building announcements. But will private sector leaders meet the moment?
Responsible AI doesn’t sit with one department, so this moment demands action from all leaders across the C-suite. Over the next few weeks, EY leaders will be sharing some of their thoughts on responsible AI from the perspective of specific leadership roles. Our first is from Peter Fox , EY Oceania HR Transformation Leader, with a sharp message to HR leaders: “You can’t install responsible AI.”
The EY Responsible AI Pulse Survey shows us that companies with real-time monitoring and formal oversight committees are far more likely to report improvements in revenue growth, cost savings and employee satisfaction. So, there’s a commercial advantage for Australian business leaders to move now.
The response must be decisive, but steady. Australia won’t win the AI race by being first. But being a fast follower allows us to build trust. We can become a safe haven for responsible AI – and that allows us to capitalise on advantages we already possess.
Summary
Trust is emerging as a more important differentiator than speed in the AI race. While organisations are rapidly adopting AI and achieving productivity gains, governance maturity is struggling to keep pace. As AI becomes embedded across business processes and increasingly developed outside traditional technology teams, risks related to oversight, accountability and transparency grow. Long-term success will depend on leaders' ability to build trusted systems, establish responsible AI governance and strengthen institutional confidence. Organisations that combine innovation with trust, governance and clear accountability will be better positioned to capture lasting value from AI.
