Who uses AI in Australian small business, who doesn't, and why

If it feels like every other business has AI doing its paperwork and you’re the last one still typing, the headlines are doing their job. The official count is quieter than that. Here it is, with who was asked and when, and what nobody has counted yet.

Who uses AI in Australian business?

About one business in eight. The Australian Bureau of Statistics (ABS) found that around 12% of Australian businesses used AI in 2024-25.1 It asked nearly 7,000 businesses, between October 2025 and February 2026.

The question was whether the business used AI at all. The ABS says it “is not designed to measure intensity or extent of use”, so it can’t tell a business that dabbles from one that runs on it.1

Size makes a difference. Around 11% of micro and small businesses (up to 19 staff, given by the ABS as one figure) used AI, against 22% of medium businesses and around 35% of large ones.1

Which industries use AI, and which barely touch it?

Information, media and telecommunications sits at the top with 38%, and transport, postal and warehousing at the bottom with 1%.2 Find your own line below. These figures cover businesses of every size, small to large, so they are not a small business figure.

Source: ABS, Characteristics of Australian Business, 2024-25, released 25 June 2026.2

What marks out the small businesses that use it?

Trying new things does. The ABS found that among small businesses with 5 to 19 staff, 19% of those that had brought in or improved a product, service or process used AI, against 4% of those that hadn’t.2 Micro businesses, with fewer than five staff, show the same gap: 18% against 6%.

My reading, and it is only mine: this looks more like an attitude than an industry. The ABS doesn’t say which comes first, and a business that tries new things may simply try AI along with everything else.

Why do businesses that don’t plan to use AI say no?

They can’t see where it fits, or they don’t trust it to make the call. Of small and medium businesses that don’t intend to use AI in the next 12 months, 54% said it isn’t relevant to their business.3 Around 65% either distrust decisions made by AI or want to keep a human in control.3

That’s from the tracker run by the federal government’s National AI Centre, a monthly survey of at least 400 small and medium businesses, for December 2025 to February 2026. Both figures are shares of the businesses that have said no for now, not of all businesses. The Centre says the distrust finding holds across business sizes and locations.

Wanting a human to make the call is a sensible instinct, and I’d keep it. Where I’d put AI in a small business, it drafts and a person decides.

What holds businesses back from technology in general?

Staff skills and uncertainty about the payoff. The ABS found 16% of businesses named a lack of staff skills as something that stopped or limited their use of technology, and 13% named uncertainty about its costs and benefits.2

That question covers computers, software and the internet as a whole. Read it as the wider picture, not a verdict on AI.

Where do businesses under 20 staff put their money and go for advice?

On the basics, and AI isn’t in their top three. In CPA Australia’s survey, run by the professional body for Certified Practising Accountants, the top three technologies Australian businesses invested in during 2025 were accounting software (33.8%), computer equipment (33.1%) and a website (29.7%).4 Averaged across all 11 Asia-Pacific markets in the same survey, AI was the top investment.5

For advice, 40.6% went to an accountant, 23.2% to friends and family and 18.6% to AI tools; 23.9% didn’t look for advice at all.4 CPA Australia is an accountants’ body, so the accountant figure is credible but not neutral. The survey was online, in November and December 2025.

If you’d like to talk it through with someone who isn’t selling anything, Service NSW offers eligible businesses up to 4 hours of free, independent business advice each financial year, and AI is one of the listed topics.6

Why will you read bigger numbers elsewhere?

Because other surveys ask a different question, of different people, at a different time. Two you’ll see quoted:

• The National AI Centre’s tracker found 43% of small and medium businesses “reported some level of AI adoption” from December 2025 to February 2026.3 Businesses describe their own stage of adoption, people who were unsure are left out, and the Centre’s page doesn’t define “adopting”.
• The .au Domain Administration (auDA), which runs Australia’s .au web addresses, found 72% of small businesses, and 61% of Australian adults, using AI “for at least one purpose”.7 It asked 408 small business owners or managers from an online panel people sign up to join, in late February and early March 2026.

The ABS asked nearly 7,000 businesses of every size whether they used AI in the business during 2024-25. That’s a narrower question than “at least one purpose” or “some level”, so, as I read it, a smaller number is what you’d expect. Don’t read the three as one trend going up; each one answers its own question.

Nobody has counted this for Western Sydney

I went looking for a count of AI use in Western Sydney or the Blue Mountains, and found none. None of the national surveys above reports a figure for this area.

What we do know is how many businesses there are. Across 13 council areas (Blue Mountains, Penrith, Hawkesbury, Blacktown, The Hills Shire, Parramatta, Cumberland, Fairfield, Liverpool, Canterbury-Bankstown, Campbelltown, Camden and Wollondilly), the ABS data shows 106,457 businesses with 1 to 199 staff in June 2025, and 101,402 of them had fewer than 20.8 That’s our own count from the ABS data; it includes owners who pay themselves a wage as staff, and it says nothing about AI.

What will we measure?

AI use in local businesses, through a survey I’m going to run. With each owner’s agreement, I’ll ask businesses in Western Sydney and the Blue Mountains three things: do you use AI today, for what job, and if not, why not, in your own words.

I’ll publish the count, the dates and how many owners answered once there are enough answers to mean something, and not before.

The question that matters is your own

What other businesses do is background. Whether AI fits your week is the question, and “not yet” is an allowed answer; that’s what the free hour is for.

Book a free hour.