While nearly half of young people have a strong understanding of AI, just 10% believe it will improve their job prospects.
That is the finding of new research from Anyway, KPMG Australia and Microsoft that surveyed 1,029 Australians aged 15–24. And the implications of the study are stark. As global AI spending races toward U.S$2.5 trillion in 2026, many young Australians remain unconvinced that the technology will translate into real career opportunities for them.
Interestingly, the reason for this comes down to confidence. While AI skills are being increasingly sought after by employers and becoming embedded into workplaces, only one in three young people feel highly confident in job interviews explaining how they use AI.
Schools sending mixed messages about AI
In an education environment, 41% of those surveyed say they already use AI for assignments and learning, with that number dropping to 15% for work or career development. However, 27% reported their schools and universities actively discourage AI use, limiting opportunities to develop practical and career-relevant experience.
“We need to stop treating AI like a cheat code and start treating it like autocorrect, a tool embedded in the environment,” Natasha Markham, Chief of Staff at Anyway told The Educator. “Using AI doesn't automatically mean higher marks; it means working differently.”
Markham said school leaders need to reframe academic integrity conversations around how students use AI, not whether they do.
“This means setting clear expectations around transparency and responsible use, and designing classwork that encourages students to think critically and creatively,” she said.
“Some teachers are already there by encouraging AI disclosures in work and building intentional AI use into classrooms.”
Markham said the opportunity is bigger than editing and writing.
“Learning how to use AI to manage time, fill skill gaps and strengthen critical thinking are practical skills students can take with them into the workforce.”
AI anxiety growing among young Australians
Another sobering finding from the report was that 63% of young Australians believe AI will eliminate jobs, while only 35% expect it to create them in equal measure.
Markham said the uncertainty surrounding AI is fuelling growing anxiety among many young Australians.
“It’s clear young Australians are anxious about an AI future -we're not doing them any favours by leaving that fear unaddressed,” she said. “AI literacy in the workplace is fast becoming what Microsoft Office was for my generation: a baseline expectation, not a bonus skill.”
Markham said a good place to start in easing uncertainty is by showing students how AI is already being used across different jobs and industries.
“This helping the technology feel less ambiguous and gives students a clearer understanding of how it can be applied once they enter the workforce,” she said. “Educators are in a unique position of where they can empower students to feel more confident in articulating how they use AI, not hide it.”
Markham said students need practical, real-world guidance on how AI applies across different careers.
“This isn't one-size-fits-all, what responsible AI stewardship looks like for a nursing student is completely different from what it means for a graphic designer or a lawyer,” she said.
“The students who'll thrive aren't the ones who avoided AI throughout their education, they're the ones who learned to use it responsibly and effectively.”
‘AI capability needs to be treated as a foundational skill’
Tim Allen, Elevate Skills Director, Microsoft Australia and New Zealand, said AI skills development should not be limited to students pursuing tech-adjacent careers.
“AI capability needs to be treated as a foundational skill, much like literacy or maths, and embedded across all subjects,” Allen told The Educator. “The report shows many students are already experimenting with AI, but they’re not always supported to apply it in meaningful ways.”
Allen said school leaders can change that by encouraging responsible use of AI in everyday learning, from analysing data in science, to drafting ideas in English, to solving real-world problems in vocational pathways.
“The goal is not to turn every student into a technologist, but to build confidence using AI tools so they can learn faster, think critically, and apply these skills in whatever path they choose.”
AI access can’t depend postcode
The report found emerging divides in AI engagement by geography, socioeconomic background and career pathway, suggesting that more needs to be done to ensure AI skills is not determined by postcode, background, or career ambition.
Allen said school leaders have an important role to play in this regard.
“It’s critical to ensure equitable access to technology, but it also providing clear guidance, teacher support, and permission to use AI constructively,” he said.
“Leaders can help normalise AI as a tool for learning and career readiness, ensuring every student understands its value and can apply it in practical ways, so the benefits of AI are shared fairly and widely.”
John Munnelly, Chief Digital Officer, KPMG Australia, said AI skills are increasingly vital for early-career roles.
“Demand for AI capability is accelerating across Australia, with employers rapidly integrating AI training into graduate programs,” Munnelly said.
“Students who are already leveraging AI to learn faster and work smarter are positioning themselves ahead of the curve. The real challenge now is ensuring young Australians recognise AI not just as a disruption, but as a generational opportunity to step confidently into the future workforce.”