‘The risk of doing nothing is simply too great’

New Zealand will invest up to $70 million over seven years in artificial intelligence research as part of a push to build competitive advantage in AI, Science, Innovation and Technology Minister Dr Shane Reti announced at an AI summit on Thursday.

The funding is aimed at building New Zealand’s AI capability, accelerating commercialisation, and driving economic growth by bringing together researchers and businesses.

“We want to raise awareness of AI’s potential to boost business performance and create high-value jobs, and to empower more New Zealanders to adopt and leverage AI as a catalyst for sustainable growth, national competitiveness, and long-term prosperity,” Reti told the summit.

“Technology-driven innovation enhances efficiency, lowers costs, and unlocks new avenues for sustainable growth. As global markets shift and competition intensifies, our ability to lift productivity, grow exports, and achieve long-term economic sustainability depends on accelerating the adoption and effective use of advanced technologies—particularly AI.

“The risk of doing nothing is simply too great, and the choice is stark. Act now and develop a competitive advantage, or risk falling further behind.”

Reti said the investment would bring the best researchers and businesses together to build capability, fast-track commercialisation, and create high-value jobs and new opportunities for researchers.

In July, the government announced the establishment of the New Zealand Institute for Advanced Technology (NZIAT), and the funding for AI research will be the second investment from the institute, the minister said.

Healthcare applications show promise

Reti highlighted a partnership between the Auckland Bioengineering Institute and the Oden Institute at the University of Texas as an example of AI’s potential benefits.

“New Zealand researchers, drawing on international AI expertise, are developing real-time digital models of the human body to personalise treatment, cut hospital costs, and generate millions in licensing revenue,” he said.

The project could deliver between $80 million and $160 million in annual healthcare savings. AI-driven solutions could save up to $32 million yearly in hospital costs through better chronic disease management and generate up to $16 million in annual licensing revenue.

Growing industry investment

Private sector AI research expenditure has increased 37% to $228 million in the 2025 tax year, according to Research and Development Tax Incentive analysis.

The announcement supports New Zealand’s inaugural AI Strategy launched in July, which focuses on responsible AI adoption through existing legislation rather than new restrictions that could stifle innovation.