Powered by
MOMENTUM
MEDIA
Australia and New Zealand businesses are increasingly reliant on overseas AI infrastructure, raising concerns about supplier concentration, cyber risks, and resilience as AI adoption accelerates, DLA Piper research has found.
New research from DLA Piper’s global investigation of the AI ecosystem, The AI Year, showed that Australian and New Zealand (ANZ) businesses are increasingly dependent on overseas suppliers to power their AI ambitions, exposing them to risks beyond their systems.
Moreover, it was found that the US and China remain major bases for cloud, AI platforms, data centres, and cyber security providers serving the region.
The dependence comes as AI adoption accelerates and businesses face concerns over cyber attacks, computer shortages, data-location rules, and supplier concentration.
For ANZ organisations, the focus has shifted from mere AI adoption to the critical task of maintaining infrastructure resilience.
According to the findings, over half of ANZ participants reported that cyber incidents have already compromised their AI value chain, with 68 per cent identifying such attacks as a top risk for 2026 – surpassing the global average by 8 percentage points.
The report from DLA Piper also noted that 60 per cent of respondents said their commercial strategy relies on AI suppliers over which they have no oversight or audit authority.
This dependence is particularly clear in the lack of control businesses have over the suppliers underpinning their AI strategies, as DLA Piper data and technology partner Ed Eisdell-Moore alluded to.
“AI resilience increasingly depends on infrastructure and suppliers that sit outside an organisation’s direct control,” Eisdell-Moore said.
Sixty-one per cent said that compute and data-location regulations forced them to rethink or delay AI projects.
The infrastructure landscape is currently being redefined by data access and compute availability, with regulatory hurdles already compelling organisations to rethink or stall their AI initiatives.
“Boards need a clearer line of sight across the AI value chain; they need to understand who the critical suppliers are, where data and compute dependencies sit, what audit or oversight rights exist, and what happens if a supplier, platform or data service fails,” Eisdell-Moore said.
These findings come as growing reliance on AI is also raising concerns about who is ultimately accountable when the technology gets it wrong, with a lawyer recently warning Australians could face serious legal consequences for relying on AI-generated advice.
The DLA Piper survey also highlighted that 79 per cent of the respondents raised concerns about consolidation of power across the AI value chain, with essential components controlled by a few dominant operators.
That reliance becomes more worrying as control of the AI value chain becomes concentrated among a small number of powerful providers, DLA Piper partner Sarah Bickett recognised.
“AI value chains are becoming more complex and more concentrated at the same time – that creates fragility,” Bickett said.
“Organisations may be deploying AI at speed, but they also need to know whether the underlying infrastructure, data rights, supplier commitments and incident response arrangements are fit for purpose.”
Seventy-six per cent of ANZ AI developers said a shift towards AI sovereignty or compute nationalism would make it impossible for their organisation to compete, compared with 65 per cent globally.
Bickett noted that the growing push for AI sovereignty highlights just how exposed ANZ businesses are to infrastructure and suppliers beyond their borders.
“The businesses that move fastest will not necessarily be those that take the most risk,” Bickett said.
“They will be those that understand the system dependencies early, allocate accountability clearly and build resilience into deployment from the start.”
