The business sector has always been at the edge of integrating new technologies to increase profitability outcomes. It used to be the internet. Now, it's AI.
Most Australian businesses, just like their global counterparts, have kept their eyes on the rapid innovation in the AI sector, and a significant majority are experimenting with implementation within their own business models. A 2026 review by the department of Industries Science and resources found that many corporate leaders have personally viewed the benefits of the rapid presentation of data streams and analysis given by these AI tools, integrating these systems as an essential part of their everyday decision making.
Most people have experienced this in the form of overnight layoffs, with increases of productivity from AI have led to cost cutting within companies, seeing junior positions disappearing overnight in favour of role compression, with one of the largest applications of AI being data collection and information processing. Existing employees have also been told to adopt AI tools, with Nvidia CEO, Jensen Huang, stating that he would be “deeply alarmed” if his “$500,000 engineer did not consume at least $250,000 worth of tokens”, suggesting that ignoring AI would be like his chip designers using “paper and pencil”.
However, with no guarantees or control over the quality of data and information provided by the “black box” models, horror stories emerge over hallucinations and their consequences.
One notable case was the Deloitte 2025 July report submitted to the Australian Department of Employment and Workplace Relations, where numerous citations were made to nonexistent papers and articles, leading to a disastrous partial refund of the $440,000 government contract. While the use of AI may have saved many hours of labour within this project, improper adherence to suggested AI guidelines resulted in a greater risk to the quality of the report which actualized into lost revenue. We worry that had this been a more serious system such as the Australian Federal Police or national crime or emergency databases, any decisions made under hallucinated data would cost lives.
Sadly, there are no signs of AI misuse from the negligence of employees seeking to cut time or costs slowing down. In fact, it seems as if a new controversy emerges everyday in every sector, as seen in this website that tracks AI hallucinations in legal cases. This presents a unique challenge to businesses, who have to consider whether the productivity gain of AI tools validates the risks introduced. Our surveyed businesses (mostly SMEs- Small to medium enterprises) admit they simply do not have the means or resources to undergo training for their employees when using AI to cut costs.
Indeed, more businesses have been adopting AI into their daily operations, as seen in a report by the Australian Department of Industry, Science, and Resources, with the Retail Trade sector at the forefront. However, in the same report, companies are surveyed on their responsible AI practices, which a significant portion have been ignoring. Notably, only 22% of companies have been providing training to their staff on proper use of AI, revealing a severe information gap and a potential risk of consequences from misuse. These consequences include the lost revenue as seen in the Deloitte case and further ethical ramifications involving the unwitting exposure of clients’ confidential data.
Sadly, these issues may only be addressed after management is confronted with visible mistakes for the majority of companies, however preventative measures provide a safety net to catch any obvious mistakes before damages multiply. The heart of the problem involves the relative unfamiliarity of these systems to current employees with no opportunity to reskill or gain experience in a post AI world. We foresee the unfortunate Deloitte case to be one of the first of many more unfortunate blunders as a result of a lack of oversight and responsible use of AI.
Irrespective of such incidents, we still hold high hopes that given the appropriate training and oversight, AI provides a unique opportunity for smaller businesses with rationed resources to level the playing field with a technological advantage. Hence, we believe that businesses need to adopt standardized AI practices and new safeguards to remain competitive. These businesses must also adequately prepare their employees with programs that expose the dangers and opportunities presented by new technologies, increasing the general quality of their labour.
AI has already changed the business landscape into an unrecognizable state, the question to businesses now is whether they are equipping themselves and their employees to reap the benefits while avoiding the detriments that come with it.