We’re Headed Into an AI Fog. Here’s What That Means for Your Small Business.

On Friday, ABC journalist Alan Kohler interviewed Craig Scroggie, CEO of NextDC: the Australian data centre company currently riding the AI infrastructure boom. The question was blunt: will the massive investment in AI be paid for by productivity gains, or by mass job cuts?

Scroggie’s answer was careful: “AI isn’t going to replace you tomorrow.” And then: companies are adopting large language models to “reduce tasks” and “speed up the time it takes to produce information.”

Read that second part again. Not tomorrow: but the direction of travel is clear.

Meanwhile, last week Meta, Alphabet, Amazon, and Microsoft reported combined quarterly earnings of $213 billion. That’s roughly 40 per cent more than every company listed on the Australian Stock Exchange: combined. Almost all of it is being funnelled back into AI infrastructure, models, and agents.

The automation arms race is real. The question for Australian small businesses isn’t whether it’s happening. It’s what to do when you can’t see where it’s going.

The fog

Last week, Toby Green: a professor of entrepreneurship at Berkeley: published a piece in Harvard Business Review with a title that landed: “The Future Is Shrouded in an AI Fog.”

His argument: confidence in a specific vision of the future is how long-term decisions get made. You train for a decade as a radiologist because you believe that expertise will be worth something in 20 years. You sign a 10-year commercial lease because you believe your business model will still work. You hire a customer service team because you believe human interaction will remain the standard.

AI has broken that confidence. Not because the future is definitely bad: but because nobody can see it clearly. Explosive growth will happen in some sectors. Wrenching disruption will happen in others. We genuinely don’t know which is which.

That uncertainty is itself an economic problem. When people can’t see the future, they don’t invest in it. Training pipelines slow down. Long-term contracts get shorter. Hiring freezes happen not because of cost, but because of doubt.

What the arms race looks like from street level

Big tech is not slowing down to let the fog clear. They’re racing through it. OpenAI, Anthropic, Google, Microsoft: all of them are shipping faster in 2026 than at any point in history. The gap between “announced” and “deployed” is now measured in weeks, not years.

For large corporations, this creates a competitive pressure. If your rival automates their customer service team and cuts costs by 30 per cent, you have to respond or fall behind. That’s the arms race dynamic: not evil intent, just competitive logic playing out at scale.

Small businesses don’t face the same pressure in the same way. You’re not competing with Telstra or CommBank on operational efficiency. But you do share their customers, their staff, and their expectations.

Customers who get instant AI responses from a big bank will start expecting faster responses from their local accountant. Staff who use AI tools in their personal lives will use them at work too: with or without your blessing. The arms race filters down.

The 25 per cent problem

Here’s where it gets stranger. The same people building the tools racing through the fog are the ones warning most loudly about where it leads.

Geoff Hinton, the godfather of modern AI, puts the probability of AI causing human extinction within 30 years at 10 per cent. Elon Musk says 20 per cent. Dario Amodei. CEO of Anthropic, which makes Claude: says 25 per cent.

These aren’t fringe opinions. They’re the considered views of the people who built this technology and are continuing to build it. When Kohler put the 25 per cent figure to Scroggie, his response was: “What’s the upside?”

It’s a revealing answer. The upside: productivity, growth, competitive advantage: is large enough that even significant downside risk doesn’t slow things down. That’s the logic driving the arms race. And it’s why the fog isn’t clearing anytime soon.

What this actually means for your small business

Forget the extinction debate. That operates on a timescale that doesn’t help you make a decision about whether to hire a customer service person or try an AI chatbot.

The fog matters to small business in three practical ways.

Hiring is harder to justify long-term. Not because you should lay people off: but because the role you’re hiring for today might look very different in three years. Build more flexibility into job descriptions. Focus on what the person can figure out and adapt to, not just what they know now.

Training for specific tools is a short-term bet. The specific software someone is expert in today: the exact prompts, the specific platform: will probably be replaced or dramatically changed within 18 months. Train for judgment and workflow, not tool mastery.

The best moves right now are reversible. In a fog, you don’t want to be locked in. Subscribe, don’t licence perpetually. Pilot before you commit. Keep your customer data in formats you own. The businesses that will come out ahead aren’t the ones who bet biggest: they’re the ones who stayed flexible longest.

The practical frame

Think of the fog like driving at night. You can only see as far as your headlights. That’s not a reason to stop: it’s a reason to drive at a speed where you can stop if something appears.

Pick one AI tool. Use it for 30 days. Measure whether it saved you time or money. Then decide if you go further or try something else. That’s not falling behind the arms race. That’s sensible navigation.

The big tech companies racing through the fog have billions of dollars to absorb bad bets. You don’t. That’s not a weakness: it’s a reason to be more deliberate, not less active.

📖 More deep dives: News Deep Dives

Sources

• ABC News: The automation arms race will have huge consequences for workers. Alan Kohler, 4 May 2026
• Harvard Business Review: The Future Is Shrouded in an AI Fog. Toby Green, April 2026
• Centre for AI Safety statement: aistatement.com
• NextDC investor briefings and ABC Business Daily podcast, May 2026

📊 Compare AI tools side by side | 💼 Free resources & AI prompt packs