Australia Won’t Win the AI Arms Race. That’s the Best News for Small Business This Year.
Forbes Australia published an editorial today worth reading. The argument: Australia will never compete with the US and China on chips, LLMs, or AI infrastructure. We don’t have the capital or the scale. Stop pretending otherwise, play to our actual strengths (critical minerals, renewable energy, stable governance), and get on with it.
The author is Daniel Petre AO, co-founder of AirTree, former Microsoft executive. He knows what he’s talking about.
He’s right about the arms race. He’s also right that it doesn’t matter for most Australians. But the piece is aimed at policymakers and investors. It doesn’t quite finish the argument for the other 2.4 million small businesses.
So here it is.
Being a user country, not a builder country, is a genuine advantage right now
Every business in Australia gets access to tools built by the best AI labs in the world, OpenAI, Anthropic, Google, Mistral, without having to fund the R&D, hire the researchers, or manage the infrastructure. We pay a subscription and get frontier capability on tap.
The businesses that win aren’t the ones who build their own models. They’re the ones who figure out what to actually do with the tools first.
That is a race Australia can win. And specifically, it’s a race where small business has a structural edge over large enterprise, because implementation speed beats budget.
MYOB’s own data shows AI-powered small businesses are growing 2.8x faster than those not using the technology. That gap isn’t coming from building models. It’s coming from using them.
What Petre gets right that most commentary misses
His piece makes a point that usually gets buried: the valuation crash everyone’s waiting for doesn’t make the technology less capable. This matters. Australian businesses that pause AI adoption while waiting for “the bubble to burst” are misreading the situation. The financial market speculation around AI stocks is noise. The capability curve is not.
The other point worth noting: he’s concerned about jobs. AI will destroy more jobs than it creates, he argues. His answer is to tax the robots, fund the transition. That’s a policy debate. But for a small business owner, the practical implication is different, you need to be in the camp that’s using AI to raise output, not in the camp being displaced by businesses that are.
The part that matters for you today
Australia’s AI opportunity isn’t in building anything. It’s in applying what already exists faster and smarter than competitors who are either too slow, too sceptical, or too large to move quickly.
Critical minerals and renewables are the macro play Petre is describing for policymakers. For small business, the equivalent is this: the tools are the same everywhere. The advantage goes to whoever uses them best, first.
That’s not a consolation prize for losing the arms race. That’s actually the game worth playing.
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