AI becomes productive when firms complement it with skills, quality data, management capability and supporting institutions. Turning AI into Productivity draws on a case base of 110 place-based innovation ecosystems and four weeks of site visits to show where Australia is strong, where the gaps are, what seven recommendations could do to capture the opportunities, and how they could be implemented. A UTS research project funded by the Google Foundation. Available from the Ama

General-purpose AI is a name that captures raw capabilities: models, compute, and data centres. Industrial AI names that capability once an economy has built the complements around it through redesigned work, new skills, better data and supporting institutions. This working paper explains why productivity gains have been slow to appear, examines Australia's data centre investment debate, and sets out what the Commonwealth, the states and businesses can do to turn AI capabilit

The real AI race is shifting from algorithms to infrastructure. Multi‑gigawatt data centres, reliable power and secure subsea cables now shape who captures value and who carries risk. Australia is an attractive Asia‑Pacific data‑centre market, but grid constraints and fragmented governance threaten its ambition to be a trusted Indo‑Pacific AI hub rather than a peripheral server‑farm landlord.

Australia’s next wave of innovation will depend on how clearly policy separates generic data centres from high‑performance computing (HPC). Bundling them into one “digital infrastructure” bucket directs capital to cloud‑style capacity while underinvesting in leadership‑class HPC needed for frontier AI, climate modelling, defence and advanced industry. The piece argues for explicit “AI‑ready HPC” and “AI‑capable cloud” tracks in national strategy, funding and governance.