Luxon 'constantly underwhelmed' by slow AI uptake in NZ businesses

Christopher Luxon says he is "constantly underwhelmed" at the slow adoption of artificial intelligence (AI) technology by Kiwi businesses.

Speaking at the China Business Summit on Thursday, the prime minister was asked how New Zealand could catch up with China, which was "six years ahead of us" in AI use.

"I think there's a lot of opportunity - I think we're missing a big trick on AI in New Zealand," Luxon responded.

"I think we always used to pride ourselves on being very good adopters of technology, and we are on one level, but if I go around the Business Association, the Chambers of Commerce, and I get people to put their hands up who's using some of the AI tools, I'm constantly underwhelmed by how little we are adopting them."

In recent years AI-first companies like OpenAI and its spinoff-turned-rival Anthropic, plus Silicon Valley veterans like Google and Microsoft, have introduced work-focused versions of their large language model (LLM) technologies.

For example, OpenAI - which launched the modern rush to use AI tools with ChatGPT in 2022 - has its coding assistant Codex, Anthropic has Cowork, while Microsoft has been embedding its Copilot offering into classic workplace tools like Excel and Word.

Luxon said the government should lead the way in adopting AI.

"We're really stuck in a 1995 way of doing things. Why can't a 32-year-old mother who needs eyeglasses for the nine-year-old daughter and wants to understand your tax rebates for the, you know, with an 11-year-old and nine-year-old daughters actually be able to just do an inquiry rather [than] have to go to MSD and IRD and all that stuff?

"When you want to get a mortgage and you've got to prove ID and income, why isn't it just auto-generated like you'd expect in corporates? ... It's not coming, it's here, it's been here now for six to nine to 12 months.

"And so we have to disrupt government and public service with a view of large service organisations that have a customer mentality of serving the New Zealand public and are technology-enabled."

He said China's rapid adoption of AI was also happening in "places like Estonia, the UAE, New South Wales, and Singapore" and it was a huge opportunity to boost productivity New Zealand might be missing out on.

"To give you a feel for R&D (research and development) in New Zealand, we're probably 19th per capita in terms of our spend on R&D, but we're 46th on commercialisation. And I just hate it when I run into people and they go, 'Oh, New Zealand invented a piece of science.' You go, 'That's lovely, sunshine, but actually who invented the $10 billion business?' And it'll be some American or some Australian that gets to do that."

Luxon said the goal was to "brutally commercialise our science system".

"I want professors to become millionaires because they're partnering with entrepreneurs and building out businesses ... where that interface between universities and entrepreneurship and government is all joined up, like we see in other parts of the world too."

There has been mixed evidence to date on whether adopting AI tools - which include other types of AI than just chatbot-style LLMs - boosts productivity, with varying results in different sectors.

While some have reported productivity drains caused by 'workslop' - sub-standard AI-generated output that others have to spend time fixing, others - such as hospital departments - have realised real gains from the technology.