Reti earmarks $70m of new agency’s budget for AI commercialisation grants

Minister of Science, Innovation and Technology Shane Reti. Photos / Getty, RNZ

The Government will invest up to $70 million over seven years through the coming New Zealand Institute for Advanced Technology “to support innovative AI research and applications, develop world-class expertise, and sharpen New Zealand’s competitive edge”, Minister of Science, Innovation and Technology Shane Reti says.

The funding will be rolled out in two phases, Reti’s office says. Initial seed grants will back about five “ambitious proposals”, with the most promising then developed into full research–industry partnerships.

The $70m forms part of the $231m allocated for the new Advanced Technology Institute in Budget 2025, Reti’s office said.

The funding begins in July 2026.

Last month, a group of scientists complained that the bulk of the Advanced Technology Institute’s $231m budget was funded through cuts to the Endeavour Fund, Health Research Fund, Marsden Fund and other research grant sources, plus money saved from defunding Callaghan Innovation (whose research arm is being replaced by the new Advanced Technology Institute).

The Government defunded Callaghan, merged several Crown Research Institutes and trimmed what it called “blue sky” research funding in favour of a “reset” focused on commercialisation.

The PSA earlier warned about a potential “brain drain” between the defunding of Callaghan at the end of June this year and funding beginning for the new Advanced Technology Institute in July next year.

“AI is transforming economies worldwide, and New Zealand must be bold and seize the opportunities,” Reti said.

“Our existing AI research is expanding, with innovative work already under way in areas such as precision health and agriculture.

“This investment will accelerate that work by bringing our best researchers and businesses together to build capability, fast-track commercialisation, and create high-value jobs and new opportunities for Kiwi researchers.”

Reti cited a recent partnership between the Auckland Bioengineering Institute and the Oden Institute at the University of Texas, supported by the Catalyst Fund, as an example of how AI can lift productivity, reduce costs, and deliver better outcomes for New Zealanders.

“New Zealand researchers, drawing on international AI expertise, are developing real-time digital models of the human body to personalise treatment, cut hospital costs, and generate millions in licensing revenue.

“Teams behind the project estimate that AI-driven public health solutions could deliver between $80m and $160m in annual healthcare savings. By combining AI with advanced modelling, this project could save up to $32m a year in hospital costs through better management of chronic diseases and generate up to $16m in annual licensing revenue from digital twin tools.

“The $70m investment in AI through the Advanced Technology Institute can help scale up exactly this sort of ambitious, world-class research that strengthens our economy and positions New Zealand as a global leader in next-generation technologies,” Reti said.

The investment in AI was recommended by the Prime Minister’s Science, Innovation and Technology Council, which recently appointed Grant Wright — an expert in digital transformation and product innovation through AI and emerging technologies, Reti said.

The council also includes Sir Peter Gluckman, MPI (and previous DairyNZ) science head John Roche, Genesis Energy boss Malcolm Johns, Fonterra chief innovation and brand officer Komal Mistry-Mehta and Halter founder Craig Piggott, among others.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.