The Impact of AI on Startups
Artificial intelligence (AI) is fast becoming a defining feature of Australia’s impact startup ecosystem. In pitch decks over recent years, mentions of AI have jumped, from 5% in 2021–22 to 19% in 2023–24, and that trajectory shows no sign of slowing (Giant Leap, 2025)….
3 classes of AI-driven impact ventures
The 2025 Impact Startups Benchmark Report (Giant Leap, 2025) classifies AI ventures into three types:
Makers: Build foundational models or core AI technologies (akin to OpenAI, Anthropic). These ventures push the frontier of AI itself.
Shapers: Customise or fine-tune these models into mission-led products, for example health diagnostics and climate tools, such as Ovum.ai, Harrison.ai.
Takers: Bolt existing AI tools onto solutions without differentiating technically or strategically. Startups that remain in this camp risk being commoditised as more capital chases AI opportunities.
Why this matters for impact investors
AI is accelerating across Australian business. According to the Australian Bureau of Statistics, business R&D in AI grew by 142% between 2021–22 and 2023–24, with spending rising from A$276 million to A$668 million (Australian Bureau of Statistics, 2025). That reflects growing institutional belief in AI’s transformative potential. Meanwhile, in the broader economy:
Roughly 40% of Australian SMEs had adopted AI by late 2024 (Industry Department, Australia, 2025).
One business was adopting AI every three minutes in 2024–25, with about 1.3 million firms (≈ 50%) now using it regularly (Amazon Web Services, 2025).
These trends suggest that the base conditions for AI-driven impact investing are strengthening: capital is flowing, demand is emerging, and technologies are maturing.
Strategic holding points
As AI matures from hype to infrastructure, the challenge for impact-focused innovators and investors is knowing where to build, and how to hold. Value increasingly accrues where AI is mission-aligned, deeply integrated, and proprietary, what some call “AI moats.” The opportunity lies in leveraging data and expertise unique to a domain, whether that’s decarbonisation modelling, biodiversity mapping, or climate risk analytics.
Building and maintaining these systems demands more than ambition. Securing talent, compute infrastructure, and high-quality data early is now a strategic imperative. The same goes for embedding strong safety, ethics, and governance frameworks from the start. As AI becomes mission-critical, credibility will rest on how effectively organisations manage bias, model drift, privacy, and transparency.
Lastly, investors, too, must evolve their approach. Durable AI innovation rarely fits traditional capital cycles. Longer investment horizons, milestone-based funding, or blended finance models can better support sustained, responsible development. Most importantly, the bridge between technology and impact must be explicit. Whether through reduced emissions, more efficient resource use, or improved social outcomes, the measure of AI’s success in this decade will be its tangible contribution to people and planet.
References
Australian Bureau of Statistics (2025). AI now fastest growing area for business R&D. https://www.abs.gov.au/media-centre/media-releases/ai-now-fastest-growing-area-business-rd#:~:text=Robert%20Ewing%2C%20ABS%20head%20of,per%20cent%20since%202021%2D2022.
Amazon Web Services (2025, August 29). New AWS research shows one Australian business adopts AI every three minutes. About Amazon Australia. https://www.aboutamazon.com.au/news/aws/new-aws-research-shows-one-australian-business-adopts-ai-every-three-minutes
Giant Leap (2025). 2025 Impact Startups Benchmark Report. https://www.giantleap.com.au/blog-posts/2025-impact-startups-benchmark-report
Industry Department, Australia (2025). AI adoption among Australian SMEs, Q4 2024. https://www.industry.gov.au/news/ai-adoption-australian-businesses-2024-q4
