As the world continues to experience the transformative power of artificial intelligence (AI), Australia is not left behind in this technological revolution. The Australian government has made a significant investment of over AU$100 million in AI development and adoption, signaling its commitment to leveraging the numerous benefits of this innovative technology.
With the country’s AI spending projected to grow by 24.4% CAGR until 2025, ASX-listed companies are well positioned to benefit from this trend, making them an attractive investment option for investors seeking to tap into the potential of AI.
Some of the larger companies driving Australia’s AI revolution include WiseTech Global, Xero, TechnologyOne and Hub24. These companies are at the forefront of AI development and adoption, leveraging the technology to enhance their operations, products, and services.
In this article, we will explore each of these companies’ recent successes and growth potential, highlighting why they are worth considering for investors seeking to gain exposure to the growing AI market in Australia.
This extensive investment in AI technology is expected to create significant opportunities for businesses and researchers, leading to enhanced productivity, improved efficiency, and the creation of new job opportunities.
Several ASX-listed companies are already utilising AI technology to enhance their services. WiseTech Global, for instance, provides cloud-based software solutions to logistics businesses using workflows, automation, and robotics. Xero provides cloud-based accounting software for small and medium sized businesses and has invested in AI technology for its services.
TechnologyOne is Australia’s largest enterprise resource planning software-as-a-service (SaaS) company, providing software to entities in government, education, health, and financial services sectors. Hub24 is a financial services company that serves the wealth industry and uses AI and machine learning to offer portfolio management, transaction, and reporting solutions.
These companies are at the forefront of the AI revolution in Australia, demonstrating the potential of AI technology to transform the country’s business landscape.
One notable enterprise resource planning software-as-a-service company, which serves various sectors such as government, education, health, and financial services, has invested in cloud-based technology, AI, and machine learning for research and development purposes.
TechnologyOne’s research and development center is focused on emerging technologies that can enhance its services. Its AI and machine learning capabilities are being harnessed to improve the accuracy and efficiency of its software, which can lead to better outcomes for its clients.
TechnologyOne’s investment in cloud-based technology, AI, and machine learning is an indication of its commitment to innovation. The company recognises that incorporating these technologies into its services can provide a competitive edge and enhance its position in the market.
As the demand for AI and machine learning solutions continues to grow, TechnologyOne’s investment in these technologies puts it in a strong position to meet the evolving needs of its clients.
WiseTech Global utilises AI in their cloud-based logistics software for the global supply chain. Their platform provides real-time data and insights to improve operational efficiency and increase visibility across the supply chain. Their flagship product, CargoWise One, is a comprehensive enterprise software that incorporates various integrated modules like freight and cargo management, customs and compliance, mobility, tracking and tracing, and analytics.
The use of AI in their platform is aimed at streamlining logistics operations, automating workflows, and enhancing supply chain performance, which marks a shift from traditional manual methods.
For example, WiseTech’s AI can analyse historical shipping data to predict future delays and automatically reroute shipments. This not only cuts costs but also enhances reliability and predictability in the supply chain. According to the company’s annual report, WiseTech Global is investing heavily in AI and machine learning to further enhance its products.
On the other hand, Xero has been integrating AI into their small business platform to automate and streamline tasks. They recently introduced a new AI-powered feature for bank reconciliation predictions. This feature uses machine learning to predict the contact and account code for transactions that can’t be matched to invoices or bills using an organisation’s bank rules, reducing manual data entry and saving businesses time.
Xero is also using AI for Analytics Plus, a suite of planning and forecasting tools designed to help businesses and advisors plan for the future with confidence. Another AI application in Xero involves text classification and entity recognition to automate form filling in both Hubdoc and Xero Expenses. The use of AI here not only reduces manual labor but also aids in better financial planning and error reduction, which would not be possible with older, more manual systems.
The company’s ERP software can adapt to the unique needs and workflows of each business. In the education sector, the AI can analyse student data to predict future performance and help educators tailor their teaching strategies accordingly. This is a significant improvement over traditional ERP systems that were rigid and difficult to customise, requiring businesses to adapt their processes to the software.
Hub24’s AI can automatically analyse market trends and financial data to provide personalised investment recommendations. Also, it can generate comprehensive reports in real-time, giving advisors and clients a clearer picture of their investments. This is a significant improvement over the past, where financial advisors had to manually analyse vast amounts of data to make investment decisions.
Investors seeking to capitalise on the growth potential of the AI market can consider investing in publicly traded companies that have integrated AI technology into their operations.
Investing in AI stocks requires due diligence and research to determine suitable tech investments. It is important to speak to a broker who can provide guidance and advice on investment decisions.
WiseTech Global’s revenue increased by 35% compared to the same period the previous year, while TechnologyOne reported an increase in profit after tax of 24% and a SaaS annual recurring revenue increase of 40% compared to the year prior. Hub24 has also reported impressive growth, with total funds under administration reaching AU$73 billion.
As AI technology continues to shape and disrupt various industries, investing in companies that have integrated AI into their operations may offer significant potential for growth and success in the future.
Developing legal frameworks for responsible and safe use of AI applications is crucial to promoting transparency and accountability in decision-making processes. The Australian government’s review on regulating AI applications acknowledges the potential risks associated with automated decision making and generative AI. While the benefits of AI are undeniable, the government recognises the need to ensure that these technologies are used in a responsible and ethical manner.
Regulators need to close gaps in existing powers to ensure that AI systems are transparent in their operations and decision-making processes. The government’s push for modern laws for modern technology is a step in the right direction. To facilitate this transition and allow developers and businesses to adjust, the government could consider implementing a period of adaptation (similar to a financial grace period) during which these new regulations can be understood and incorporated into AI development and use.
While AI will bring benefits to society, including driving productivity growth, consolidating patient data, analysing medical images, optimising engineering designs, and saving costs in legal services, the potential risks and concerns need to be addressed through proper legal frameworks.
ASX-listed companies have been quick to capitalise on this trend, having demonstrated their ability to leverage AI technology to enhance their products and services, as well as improve operational efficiency.
As AI continues to transform industries, the companies that are able to successfully incorporate AI into their strategies will likely see continued success.
With the Australian government’s support and a growing demand for AI solutions, ASX-listed companies are well positioned to drive Australia’s AI revolution and provide attractive investment opportunities.
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