The New Zealand (NZ) Government has released its first Strategy for AI (Strategy), alongside Responsible AI Guidance for Businesses (Guidance) (accessible here). In this article, we provide a summary of the Strategy. Our view and summary of the Guidance is available here.
The Strategy and Guidance follows a Cabinet paper released in July 2024 that signalled the Government’s “light-touch and principles-based approach” to AI policy (as discussed in our article here).
Why this Strategy is important for NZ
The use of AI tools – which are developing at an unprecedented pace – are already reshaping societies, industries and economies around the world. The Strategy recognises that adopting generative AI alone could add $76 billion to the NZ economy by 2038, or over 15% of our GDP (Microsoft, 2024).
Until now, NZ was the only OECD country that had not published an AI strategy. With the release of the Strategy, the Government aims to reinforce its message to the business community: invest with confidence in AI.
The current state of play
New Zealand’s AI update currently lags comparator countries.
In NZ, another gap is emerging. As of 2024, 67% of larger NZ businesses reported utilising some form of AI (up from 48% in 2023).[1] However, 68% of NZ Small and Medium Enterprises (SMEs) (compared to 38% of Australian SMEs) [2] reported no plans to evaluate or invest in AI.[3]
The Strategy recognised the following interconnected barriers to AI adoption:
- regulatory uncertainty,
- perceived complexity, ethics, and risks
- lack of understanding and perceived value; and
- lack of AI Skills
The Strategy and Guidance aims to address these barriers.
Here’s what you need to know about the Strategy
NZ’s competitive advantage is in adoption, not development
The Strategy deliberately emphasises AI adoption and application, rather than foundational AI development. According to the Strategy, NZ’s competitive advantage lies not in competing with Google, OpenAI, or other foundational model developers, but in becoming sophisticated adopters who can quickly identify, adapt, and deploy AI solutions to local challenges, such as agriculture and healthcare.
New Zealand should also look to develop expertise in AI governance, ethics, and application that positions us as thought leaders in responsible AI use.
Light-touch and principles-based approach to AI policy
The Strategy confirms the Government’s light-touch, principles-based approach to AI regulation. Rather than introducing new legislation, NZ will aim to adjust its existing laws and regulations in response to AI-related risks as they arise. NZ will also be guided by the OECD AI Principles – an international framework for AI governance that promotes innovative, trustworthy AI aligned with human rights and democratic values
Further international collaboration and investment
NZ will continue to engage with partner governments and international organisations to build NZ’s AI capabilities. International partnerships include the Singapore – New Zealand AI for Healthy Ageing Initiative, a research collaboration focused on AI solutions to shared neurological and mental health challenges in ageing populations
The Government also aims to attract greater Foreign Direct Investment (FDI), including by establishing Invest New Zealand (an entity tasked with identifying opportunities to attract FDI), implementing changes to the Overseas Investment Act 2005 to speed up decisions, and introducing changes to the Active Investor Plus Visa to simplify the visa categories and expand the scope of acceptable investments to attract skilled investors.
Reforms to the Science, Innovation and Technology System
NZ will be reforming its Science, Innovation and Technology System, which receives $1.2 billion of government funding each year. There is a heavy focus on research for novel technologies.
Of note, an advanced technology public research organisation (PRO) will be created. The Government has already invested $71 million into a technology science platform hosted by the Robinson Research Institute, which aims to grow NZ’s high-tech exports.
Other measures aim to address priorities set by the Prime Minister’s new Science Innovation and Technology Advisory Council, including:
- research into novel use cases for AI technologies in areas such as biomedical sciences, quantum physics and environmental monitoring via the Marsden Fund; and
- the creation of the Research and Development Tax Incentive, which offers a tax credit of 15% on eligible expenditure.
The Government also plans to introduce a new national policy for the management of intellectual property in universities and PROs to help bring new technologies to market.
AI in the public sector
The Strategy and Guidance complements the work led by Hon Judith Collins KC to increase AI uptake within the public sector and to digitise government operations. This work includes:
- The release of Responsible AI Guidance for the Public Service to support the safe and trustworthy uptake of AI in the Public Service.
- The appointment of an AI Expert Advisory Panel by the Government Chief Digital Officer (GCDO) on 30 June 2025.
- A partnership between the GCDO and the Public Service Commission’s Leadership Development Centre to develop two new AI training programmes for public service agencies.
- The development of a Public Service AI Assurance Regime by the GCDO in collaboration with relevant agencies.
Implications for businesses
The Strategy is a step forward on NZ’s AI journey, providing greater clarity on the Government’s approach to AI policy. However, businesses need to consider the implications of the Strategy and in particular, the Guidance, on their own business.
The challenge for businesses will be moving beyond understanding the high-level recommendations, to practically applying them in their day-to-day operations and decision-making.
Ultimately, it is this practical, deliberate application of AI – by businesses across all sectors and sizes, including SMEs – that will determine whether the Strategy’s vision for confident AI adoption translates into real-world productivity, resilience, and growth for New Zealand.
If you have any questions about how the Strategy and Guidance applies to your business, please get in touch.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
Footnotes:
[1] Datacom. (2024). State of AI Index: AI attitudes in New Zealand 2024.
[2] Department of Industry, Science and Resources. (2025, June 4). AI Adoption Tracker.
[3] Spark New Zealand. (2024, September 18). 68% of New Zealand’s small and medium businesses have no plans to adopt AI. Scoop.
