# AI in New Zealand: the 2026 landscape.

URL: https://levystreet.com/research/ai-in-new-zealand/
Updated: 2026-10-19

Artificial intelligence in New Zealand in 2026: government strategy, the Privacy Act's IPP 3A, regulators, data residency, the ecosystem and adoption.

## Short answer

New Zealand's approach to AI in 2026 is light-touch: the July 2025 national AI Strategy relies on existing law rather than an AI Act. The working rules come from the Privacy Act, including IPP 3A since 1 May 2026, consumer law and sector regulators such as the RBNZ and FMA. There is no official business adoption figure; vendor surveys range from 36% of SMEs to 91% of larger organisations.

- The July 2025 AI Strategy takes a "light-touch and principles-based approach" and relies on existing law.
- IPP 3A has applied since 1 May 2026: indirect collection of personal information needs notice.
- The RBNZ and FMA set joint expectations on frontier-AI cyber risk on 15 October 2026.
- No major vendor guarantees model processing inside NZ; AWS Bedrock's AU profile keeps Claude in ANZ.
- No official adoption statistic exists; vendor surveys range from 36% to 91%.

## The Government's position: adopt, don't legislate

New Zealand published its first national AI strategy in July 2025. As MBIE put it: "Until now, New Zealand was the only OECD country that had not published an AI strategy". The strategy is about using AI, not building it. It "deliberately emphasises AI adoption and application rather than foundational AI development", and states: "New Zealand is taking a light-touch and principles-based approach to AI policy." Risks are left to existing law on privacy, consumer protection and human rights.

Quote the exact document you rely on. The 2024 Cabinet paper said "light-touch, proportionate and risk-based"; the formal Cabinet minute records only a "proportionate and risk-based approach to AI regulation where needed". In June 2025 Cabinet added a commitment to keep New Zealand's rules "no more restrictive than comparator countries in the OECD".

| Date | Development |
|---|---|
| 26 June 2024 | Cabinet committee agrees a proportionate, risk-based approach, preferring existing mechanisms to a standalone AI Act |
| 30 January 2025 | Public Service AI Framework launched; advisory, not binding |
| 8 July 2025 | AI Strategy launched by Minister Shane Reti; MBIE's voluntary Responsible AI Guidance for Businesses published the same month |
| 18 September 2025 | Up to $70 million over seven years for AI research through the NZ Institute for Advanced Technology |
| January 2026 | AI Advisory Pilot: up to 50% co-funding, capped at $15,000, for a small business AI plan |
| 1 April 2026 | Government Chief Digital Officer functions move to a new Government Digital Delivery Agency |
| 21 April 2026 | Law Commission asked to review automated decision-making by government |
| 12 October 2026 | RNZ reports Labour policy to replace the strategy with an action plan and an Office of AI in DPMC |

This is the current Government's stance, dated 19 October 2026. RNZ reported that National was sticking with the strategy, while Labour's plan "promises to establish an Office of AI within the Department of the Prime Minister and Cabinet". Recheck after the election.

In government, the 2026 cross-agency survey found "59 organisations reported 545 AI use cases", double 2025's 272, with 31% operational.

## Privacy law: the rules that already bite

The Privacy Commissioner's position is the starting point for any AI project: "Our starting point is that the Privacy Act applies to everyone using AI tools in New Zealand." Four developments matter in 2026.

- **IPP 3A is in force.** Since 1 May 2026, an agency collecting personal information "from a source other than the individual themselves must take reasonable steps to ensure that the individual is aware of specified matters." There are now 14 information privacy principles, and IPP 3A does not apply to information collected before that date. AI tools that enrich records from the web are a common trigger.
- **OPC expects a privacy impact assessment** before AI tools are used, along with human review before acting on outputs.
- **Biometrics have their own code.** The Biometric Processing Privacy Code 2025 applied to new processing from 3 November 2025, and the transition period for existing users "ended on 3 August 2026".
- **Penalties remain light.** The Commissioner says "in New Zealand there's no civil penalty regime", and has called for stronger protections around automated decision-making. Failing to notify the Commissioner of a notifiable privacy breach carries a maximum fine of $10,000.

Offshore AI vendors are covered too: the Act applies to overseas agencies carrying on business here. And the public is wary. In OPC's 2026 survey of 1,245 people, 67% were concerned about agencies and businesses using AI to make decisions about people from personal data. Our lesson on [protecting customer information](/learn/protecting-customer-information-when-using-ai/) covers the day-to-day practice.

## Sector regulators are setting the practical rules

With no AI Act, sector bodies are writing the operative expectations.

| Regulator | Position | Date |
|---|---|---|
| RBNZ and FMA | "Boards and senior management need to know where AI is being used in their business"; entities "should assume incidents will occur" | 15 October 2026 |
| FMA | Exploratory thematic review of AI in financial advice | 6 August 2026 |
| Commerce Commission | "AI enabled" products must not "mislead or oversell AI capability" | July 2025 |
| NZ Law Society | Courts are "already grappling with references to cases that do not exist" | 17 December 2025 |
| Medical Council | Informed consent needed for some AI uses, including AI scribes | 10 March 2026 |
| Real Estate Authority | An error by a GenAI tool "will not be a defence" | 12 November 2024 |

Two policy tracks are open. Cabinet wants a report back by 31 March 2027 "on a possible copyright framework for GenAI in New Zealand", and a member's bill extending intimate-image offences to deepfakes awaits a select committee report due 20 November 2026.

## Infrastructure: where AI models actually run

A cloud region in New Zealand means data can be stored here; it does not mean an AI model processes it here. As at 19 October 2026, no major AI vendor checked offers guaranteed model processing inside New Zealand.

| Provider | Stored in NZ | Model processing in NZ | Closest option |
|---|---|---|---|
| Microsoft | Yes: New Zealand North region since 12 December 2024 | No: NZ is not on Microsoft's in-country Copilot processing roadmap | Data at rest in NZ |
| AWS | Yes: Auckland region since September 2025 | Not guaranteed: Bedrock routes across regions | Bedrock "AU" profile keeps Claude processing "within the ANZ geography" |
| Google Cloud | No: Auckland region announced in 2022 but absent from Google's region list | No | Sydney |
| OpenAI | No | No | Australian storage for eligible ChatGPT plans, processed offshore |
| Anthropic API | No | No | Inference "us" or "global" only |

Physical capacity is coming. Datagrid has begun site works on a $3.5 billion AI data centre campus at Makarewa, north of Invercargill, designed for "high-density GPU clusters serving global AI and cloud providers". For architecture choices, see our guide to [data residency for AI systems](/engineering/data-residency-for-ai-systems/).

## The ecosystem: funding, institutions and a cautionary tale

- **AI Forum New Zealand**, founded in 2017, reports more than 280 members and runs the free AIGovernance.nz toolkit.
- **NZ Institute for Advanced Technology (NZIAT)**: five AI research platform concepts were shortlisted in December 2025, each with $250,000 to develop a proposal. A final platform was expected in the first half of 2026; we found no announcement of a winner by 19 October 2026.
- **Callaghan Innovation** is "being disestablished", not closed: it is still operating in 2026/27, while R&D grants and Research and Development Tax Incentive support have moved to MBIE.
- **Te Hiku Media** leads Papa Reo, a te reo Māori language-technology programme it says was awarded $13 million, and publishes its own Kaitiakitanga License, which bars commercial use of its code without explicit permission.
- **Soul Machines**, the Auckland digital-human company, went into receivership on 5 February 2026; NBR reported it owed creditors more than $19.5 million.

## How many organisations use AI: only vendor surveys can say

There is no official figure. Stats NZ's Business Operations Survey "was last carried out in 2023, and was paused for 2024 and 2025". Its successor, the 2026 Survey of Business Operations, asks about AI, but no results had been published by 19 October 2026. Every adoption percentage in circulation comes from a commercial survey, and they ask different people.

| Survey | Published | Who was asked | Sample | Headline |
|---|---|---|---|---|
| Datacom State of AI Index | August 2026 | Senior leaders, organisations with 100+ staff | 207 | 91% use some form of AI |
| Deloitte Access Economics for 2degrees | 28 April 2026 | NZ firms | 259 | 82% currently using AI |
| Xero | 18 May 2026 | Xero's SME customers | 1,081 | 61% proactively using AI |
| MYOB Business Monitor, via IT Brief | 4 August 2026 | Owners, managers, directors, weighted | 1,026 | 36% of SMEs proactively using AI |

Depth is thinner than reach. Datacom found only 15% of larger organisations scaling AI organisation-wide, and 64% of leaders wanting specific AI legislation, a contrast with the Government's stance. Public trust is low: in the KPMG and University of Melbourne global study, "Only 44% of New Zealanders believe the benefits of AI outweigh the risks, the lowest ranking of any country."

## What this means for a New Zealand organisation

The absence of an AI Act does not mean an absence of obligations. Take legal advice for your situation.


- Run a privacy impact assessment before AI touches personal information
- Check whether each vendor uses your data for its own purposes, such as training
- Send IPP 3A notices when AI enriches records from other sources
- Record where models process data, not only where it is stored
- Substantiate every claim that your product uses AI
- Read your sector regulator's AI guidance and date your review
- Consult staff before AI changes that affect their roles
- Apply the Te Mana Raraunga principles wherever Māori data is involved


Our [AI governance advisory](/services/ai-governance/) turns this into policy and controls, and our [AI use policy template](/resources/ai-use-policy-template-for-nz-smbs/) is a free place to start. For regulated work, see [AI for financial services](/industries/financial-services/) or talk to us about [AI consulting in New Zealand](/services/ai-consulting/).

## What to watch next

- **First official adoption figures** from the 2026 Survey of Business Operations.
- **The 2026 general election** and whether the strategy survives.
- **The deepfake bill**, with a select committee report due 20 November 2026.
- **The NZIAT AI research platform** decision.
- **The generative AI copyright report-back**, due 31 March 2027.

Sources were read on 19 October 2026. Policy is moving quickly, so check dates before relying on any line.

## Questions people ask

### Does New Zealand have an AI law?

No. As at 19 October 2026 New Zealand has no AI-specific statute. The Government's July 2025 strategy relies on existing, technology-neutral law such as the Privacy Act 2020, the Fair Trading Act and human rights law, with sector regulators issuing guidance. A member's bill on deepfakes is before a select committee but is not law.

### What is IPP 3A and does it affect AI?

IPP 3A is the information privacy principle added by the Privacy Amendment Act 2025, in force from 1 May 2026. When an organisation collects personal information from someone other than the individual, it must take reasonable steps to make the person aware of matters such as the purpose and recipients. AI tools that enrich records from the web or other databases are a common trigger.

### Can I keep AI processing inside New Zealand?

Storage, yes; processing, mostly no. Microsoft and AWS run cloud regions in Auckland, but as at October 2026 no major AI vendor checked offers guaranteed model processing inside New Zealand. The closest option is Amazon Bedrock's AU profile, which keeps Claude processing within Australia and New Zealand. OpenAI's and Anthropic's own APIs have no NZ option.

### How many New Zealand businesses use AI?

No official figure exists yet. Stats NZ paused its Business Operations Survey in 2024 and 2025, and the 2026 Survey of Business Operations, which asks about AI, had not published results by 19 October 2026. Vendor surveys give 36% of SMEs (MYOB), 61% of Xero's SME customers, 82% of firms (Deloitte for 2degrees) and 91% of organisations with 100 or more staff (Datacom).

### What government support is there for AI adoption?

An AI Advisory Pilot launched in January 2026 offered eligible small businesses up to 50% co-funding, capped at $15,000, for an AI plan through the Regional Business Partner Network. The Government has also committed up to $70 million over seven years to AI research through the NZ Institute for Advanced Technology. Check whether the pilot is still open before applying.


## Sources

- [New Zealand's Strategy for Artificial Intelligence: Investing with confidence](https://www.mbie.govt.nz/assets/new-zealands-strategy-for-artificial-intelligence.pdf)
- [Approach to work on Artificial Intelligence: minute of decision ECO-24-MIN-0119](https://www.mbie.govt.nz/dmsdocument/28919-approach-to-work-on-artificial-intelligence-minute-of-decision-proactiverelease-pdf)
- [Going for Growth: Enabling AI uptake, minute CAB-25-MIN-0216](https://www.mbie.govt.nz/dmsdocument/31025-going-for-growth-enabling-ai-uptake-across-the-economy-minute-of-decision-proactiverelease-pdf)
- [Government AI strategy to boost productivity](https://www.beehive.govt.nz/release/government-ai-strategy-boost-productivity)
- [Responsible AI Guidance for Businesses](https://www.mbie.govt.nz/assets/responsible-ai-guidance-for-businesses.pdf)
- [NZ launches AI advisory pilot for small businesses](https://itbrief.co.nz/story/nz-launches-ai-advisory-pilot-for-small-businesses)
- [Taking a light touch with AI's dangers and evils](https://www.rnz.co.nz/news/science-and-technology/1852139/taking-a-light-touch-with-ai-s-dangers-and-evils)
- [Government Digital Delivery Agency established](https://www.digital.govt.nz/news/government-digital-delivery-agency-established)
- [2026 cross-agency AI survey highlights](https://www.digital.govt.nz/standards-and-guidance/technology-and-architecture/artificial-intelligence/research-ai-public-service/2026-cross-agency-ai-survey-highlights)
- [Law Commission to review automated decision-making by government](https://www.lawcom.govt.nz/about-us/news-and-media/law-commission-to-review-automated-decision-making-by-government)
- [AI topic page](https://www.privacy.org.nz/resources-and-learning/a-z-topics/ai/)
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- [Enhancing the Privacy Act](https://www.justice.govt.nz/justice-sector-policy/key-initiatives/enhancing-the-privacy-act/)
- [Privacy Act 2020](https://www.legislation.govt.nz/act/public/2020/31/en/latest/)
- [Biometric Processing Privacy Code](https://www.privacy.org.nz/privacy-principles/codes-of-practice/biometric-processing-privacy-code/)
- [Privacy Act 2020 turns 5: changes are needed](https://www.privacy.org.nz/tuhono-connect/statements-media-releases/privacy-act-2020-turns-5-changes-are-needed/)
- [2026 annual survey on privacy](https://www.privacy.org.nz/tuhono-connect/surveys/2026-annual-survey-on-privacy/)
- [RBNZ and FMA outline supervisory expectations on cyber and AI risks](https://www.rbnz.govt.nz/news-and-events/news/2026/10/rbnz-and-fma-outline-supervisory-expectations-on-cyber-and-ai-risks)
- [Thematic review: AI in financial advice](https://www.fma.govt.nz/library/reports-and-papers/thematic-review-ai-in-financial-advice/)
- [Navigating the rise of AI: Perspectives from a competition and consumer regulator](https://www.comcom.govt.nz/assets/pdf_file/0029/367481/Paper-Navigating-the-rise-of-AI-Perspectives-from-a-Competition-and-Consumer-Regulator.pdf)
- [Lawyers are responsible for the contents of court documents prepared using generative AI](https://www.lawsociety.org.nz/news/newsroom/lawyers-are-responsible-for-the-contents-of-court-documents-prepared-using-generative-ai/)
- [Guidance on using AI in patient care](https://www.mcnz.org.nz/assets/standards/Guidance-on-using-artificial-intelligence-AI-in-patient-care-March-2026.pdf)
- [Generative AI Guidance for Real Estate Licensees](https://www.rea.govt.nz/assets/2024-Uploads/REA-Generative-AI-Guidance-for-Real-Estate-Licensees_November-2024.pdf)
- [Updates to the Copyright Act](https://www.mbie.govt.nz/business-and-employment/business/intellectual-property/copyright/updates-to-the-copyright-act)
- [Deepfake Digital Harm and Exploitation Bill](https://bills.parliament.nz/v/6/41586b19-bece-4e53-94eb-08de11d86e7a?lang=en)
- [New Zealand's first hyperscale cloud is open for business](https://news.microsoft.com/en-nz/2024/12/12/new-zealands-first-hyperscale-cloud-is-open-for-business/)
- [Microsoft offers in-country data processing to 15 countries for Microsoft 365 Copilot](https://www.microsoft.com/en-us/microsoft-365/blog/2025/11/04/microsoft-offers-in-country-data-processing-to-15-countries-to-strengthen-sovereign-controls-for-microsoft-365-copilot/)
- [Now open: AWS Asia Pacific (New Zealand) Region](https://aws.amazon.com/blogs/aws/now-open-aws-asia-pacific-new-zealand-region/)
- [Run generative AI inference with Amazon Bedrock in Asia Pacific (New Zealand)](https://aws.amazon.com/blogs/machine-learning/run-generative-ai-inference-with-amazon-bedrock-in-asia-pacific-new-zealand/)
- [Compute Engine regions and zones](https://cloud.google.com/compute/docs/regions-zones)
- [Data residency and inference residency for ChatGPT](https://help.openai.com/en/articles/9903489-data-residency-and-inference-residency-for-chatgpt)
- [Data residency](https://platform.claude.com/docs/en/manage-claude/data-residency)
- [Works start on Datagrid's Southland AI data centre campus](https://www.reseller.co.nz/article/4210204/works-start-on-datagrids-southland-ai-data-centre-campus.html)
- [About AI Forum New Zealand](https://aiforum.org.nz/about/)
- [Accelerating AI research and innovation](https://www.beehive.govt.nz/release/accelerating-ai-research-and-innovation)
- [Next steps for advanced tech research](https://www.beehive.govt.nz/release/next-steps-advanced-tech-research)
- [Refocusing the science, innovation and technology system](https://www.mbie.govt.nz/science-and-technology/science-and-innovation/refocusing-the-science-innovation-and-technology-system)
- [Statement of Performance Expectations 2026/27](https://www.callaghaninnovation.govt.nz/assets/Uploads/Documents/Callaghan-Innovation-Statement-of-Performance-Expectations-2026_27-FINAL.pdf)
- [Papa Reo](https://tehiku.nz/te-hiku-tech/papa-reo/)
- [Kaitiakitanga License](https://github.com/TeHikuMedia/Kaitiakitanga-License)
- [Soul Machines in receivership](https://www.nbr.co.nz/tech/soul-machines-in-receivership)
- [Soul Machines owes $19.5m in receivership](https://www.nbr.co.nz/tech/soul-machines-owes-19-5m-in-receivership)
- [About the Business Operations Survey](https://www.stats.govt.nz/help-with-surveys/list-of-stats-nz-surveys/about-the-business-operations-survey/)
- [2026 State of AI Index: AI uptake at 91%, leadership lags](https://datacom.com/nz/en/insights/press-release/2026-state-of-ai-Index-ai-uptake-at-91-leadership-lags)
- [Productivity Propelled: Impact of AI adoption](https://www.2degrees.nz/sites/default/files/2026-04/Productivity_propelled-Impact_of_AI_adoption.pdf)
- [Techweek: barriers preventing Kiwi SME AI adoption](https://www.xero.com/nz/media-releases/techweek-nz-barriers-preventing-kiwi-sme-ai-adoption/)
- [New Zealand SMEs widen AI adoption gap, MYOB finds](https://itbrief.co.nz/story/new-zealand-smes-widen-ai-adoption-gap-myob-finds)
- [Trust, attitudes and use of artificial intelligence: A global study 2025](https://kpmg.com/nz/en/home/insights/2025/05/trust-attitudes-and-use-of-ai.html)
- [Māori Data Sovereignty Principles](https://www.temanararaunga.maori.nz/s/TMR-Maori-Data-Sovereignty-Principles-Oct-2018.pdf)
- [The basics of workplace changes](https://www.employment.govt.nz/fair-work-practices/restructuring-and-workplace-change/the-basics-of-workplace-changes)

Published by Levy Street (https://levystreet.com), Wellington, New Zealand.