Australia’s AI adoption being held back by executive inertia, says EY

Good morning. Here's what happened overnight and what you need to know today.

1.

Roadblock bosses: EY global vice chair for assurance Marie-Laure Delarue raised her concerns about those driving AI adoption in corporate Australia to Capital Brief, arguing that entry-level employees are in some cases more eager for AI adoption than executives, boards and leaders. In the future, she said teams would be made up of humans and AI, and team leaders would need to learn skills in developing not only their staff but also their AI agents. A recent EY report found only 32% of Australian workers rated their AI proficiency as 'high' and 35% had received formal training. It said many workers felt "uncertain, unsupported, or even restricted from using AI at work" and warned this "is not just a skills gap, it's a culture gap". Delarue said the corporate world must develop a technology adoption muscle if they want to stay competitive. (Capital Brief)

2.

Stream line: Former prime minister Malcolm Turnbull urged the Albanese government to hold firm on its controversial streaming quotas to head off mounting backlash and possible retaliation from the US. In response to questions from Capital Brief, Turnbull acknowledged the government’s proposed streaming regulation may expose Australia to US retaliation. However, he said the risk is mitigated “if not entirely eliminated” by Australia “standing its ground” on the policy. “Trump is a bully and makes no bones about it. So if you show weakness he will push harder. The right approach to take is just to say: sorry, we can’t help you here,” Turnbull said. The former PM said he took that approach when Obama was trying to pressure Australia over regulation of biologics in the Trans-Pacific Partnership negotiations. The government’s streaming quotas passed the Senate on Thursday evening, after Labor struck a deal with the Greens to secure the party’s support of the legislation. (Capital Brief)

3.

First fallout: The US Securities and Exchange Commission is investigating Jefferies Financial Group over its ties to bankrupt car parts company First Brands Group, The Financial Times reported citing two people with knowledge of the matter. The regulator is seeking information on whether Jefferies gave investors in its Point Bonita fund adequate disclosure about their exposure to First Brands, which filed for bankruptcy in September with USD12 billion ($18.4 billion) in debt. The SEC is also reportedly looking into internal controls and potential conflicts within and across different parts of the bank. Jefferies had a long-standing relationship with First Brands, including advising the company, providing invoice financing and placing billions in loans with other investors, the paper said. Jefferies CEO Rich Handler said last month the bank believes it was “defrauded” by First Brands. (FT)(Bloomberg)

4.

HK inferno: Hong Kong is facing the aftermath of its deadliest fire in decades, as authorities investigate possible gross negligence and prepare urgent safety reforms. The blaze at the Wang Fuk Court housing complex in Tai Po, which broke out Wednesday afternoon, has killed 83 people and injured 155, according to the Fire Services Department. Hundreds of people are still missing. Police have arrested three men – two directors and an engineering consultant from Prestige Construction & Engineering – on suspicion of manslaughter. Senior superintendent Eileen Chung told media investigators believe the company’s leaders were “grossly negligent”, citing unsafe materials including foam panels and external walls that may not have met fire resistance standards. The city’s anti-corruption agency has also launched a probe into the renovation project. Contact had been lost with 279 people early Thursday, and authorities have not updated that figure since. (AP)(Reuters)(Bloomberg)

5.

Peace posturing: Russian President Vladimir Putin said the revised US-Ukraine peace framework could serve as the basis for future agreements, but threatened to seize territory by force if Ukrainian troops did not withdraw from territories they hold. Speaking in Bishkek after a summit with former Soviet republics, he said the original 28-point US proposal was not a draft agreement but a set of issues, split into four components during Geneva talks and sent to Moscow. Putin said the US was taking Russia’s position into account but stressed there was no final version. He called Ukraine’s leadership illegitimate, making a deal legally impossible, and said any agreement must include recognition of Russia’s territorial gains. Crimea and Donbas, he added, should be discussed with the US. He confirmed Trump’s envoy Steve Witkoff would visit Moscow next week and dismissed claims Witkoff was pro-Russian as “nonsense”. Meanwhile, Russia launched 142 drones overnight, and Ukrainian officials said three people were injured in strikes on Odesa and Dnipropetrovsk. (Capital Brief))(Reuters)(Bloomberg)(AP)

6.

Robot bubble: China’s top economic planner warned the country’s booming humanoid robot sector is at risk of a market bubble due to a surge in highly repetitive products. National Development and Reform Commission (NDRC) spokesperson Li Chao said on Thursday that with over 150 companies already building humanoid robots (and more entering) the market faces oversaturation that could squeeze out space for research and development. Speaking at a briefing in Beijing, Li said the sector reflects a broader challenge in frontier industries: balancing rapid growth with bubble risks. The NDRC is working with relevant departments to boost policy support, accelerate technological breakthroughs and promote real-world applications, Li said. He added the commission will establish industry standards, evaluation systems and entry-exit mechanisms to support fair competition and sustainable development.(Capital Brief)(Xinhua)(Bloomberg)(Reuters)

7.

RIP SaaS: With three decades of venture capital and entrepreneurship experience across the US and Australia, King River Capital partner Zeb Rice sees AI-driven “vibe coding” beginning to displace entire categories of software products and the specialist teams that built them. But according to Rice, despite the death of SaaS, Australia remains competitive in the AI cycle due to its engineering talent, more grounded pricing, and the faster-than-expected spillover of AI activity from the US. The transmission from Silicon Valley is now nearly instantaneous, Rice told Capital Brief. Australian companies are building at comparable speeds, with more reasonable valuations. King River closed a USD100 million ($150 million) fund in March focused on AI-driven software start-ups. Backers included Future Group, Marinya Capital, David Gonski, and the Smorgon family. The VC had “assumed this [AI] fund would lean heavily toward US investments”, instead, the past quarter has delivered a “bevy” of Australian AI startups rivalling US counterparts. (Capital Brief)

8.

Chip wars: Taiwanese prosecutors searched the homes of former Taiwan Semiconductor Manufacturing Co. (TSMC) vice-president Lo Wei-Jen, who has been accused of leaking trade secrets to his new employer, Intel. The searches suggest that Taiwan is deepening its probe into the dispute which saw TSMC file a lawsuit in Taiwan’s intellectual property and commercial court seeking damages for breach of contract from Lo, who retired from the company in July. Lo was at one stage in charge of research and technology development at TSMC and helped facilitate the mass production of cutting-edge chips, including those used to make AI accelerators during his two decades at TSMC. After TSMC alleged there is a “high probability” of Lo leaking TSMC’s trade secrets to Intel, Intel CEO Lip-Bu Tan told employees on Wednesday that the company had acted ethically when it hired the executive and that Lo “continues to have our full support.” (Reuters)(Bloomberg)(Oregon Live)(Capital Brief)