Chart of the Month - September 2025

Opinions on AI range from it being another dotcom bubble to Terminator 2 scenarios. Regardless, no company or country can afford to be left behind. The good news for Australia is that AI is now the fastest growing area for business investment in R&D. Its recent growth outstrips all other groups in Information and Computing Sciences (see chart below).

The size of the R&D investment in AI

Australian private sector investment in R&D has been growing over the last 8 years, with investment in Information and Computing Sciences the largest area (see chart below).

Within Information and Computing Sciences, AI (AUD 668 million) is now the fourth largest area behind software engineering (4.878 billion) , information systems (1.08 billion), and other (750 million).

AI research specialisation by industry

Looking at patent applications over the last 10 years in Australia, the computer, electronics, and optical manufacturing industry dominates with more than twice the patent applications of the next largest industry (see chart below). The data includes research performed by government agencies.

 Source: Bratanova A*, Hajkowicz SA*, Evans D, Chen H,

Bentley S, Pham H, Hartman S (2025): Australia’s artificial intelligence ecosystem: The 2025 update.

Australian Government Department of Industry, Science and Resources National Artificial Intelligence

Centre, CSIRO

When looking at the share of AI patent applications by industry in Australia compared to the global average, we can see that Australia is outperforming in the areas of: specialised construction; other mineral product manufacture; wood and timber products; and chemical manufacturing industries. These areas have a revealed technology advantage (RTA) of greater than one (see chart below).

Source: Ibid

A global comparison

While there is no readily available data on private investment in AI research by country, there is data on investment in AI startups by country. Between 2013 and 2024, Australia ranked 13th in the world for total investment in its AI companies (see chart below).

In terms of the relative performance of Australian AI research, after accounting for population size, Australia ranked 14th in the world for granted AI patents in 2023. Australia’s performance has increased by 240% since 2013.

Source: Harvard AI Index 2025

Final thoughts

With the impact of ChatGPT and LLMs on the world over the last three years, it is good to see that Australian investment in AI research increased by 142% between 2021-22 and 2023-24. Australia is on the right track!

On the global stage, Australia's return on its AI investment (adjusted for population) and the level of investment in Australian AI companies puts Australia among the top 15 countries in the world.