In an era where artificial intelligence (AI) has emerged as a transformative force across various sectors, Telstra, Australia’s leading telecommunications and technology company, emphasizes the importance of scrutinizing the cost-benefit ratio of its AI investments. As the company reported solid results for the first half of the 2026 financial year, its chief financial officer, Michael Ackland, shared insights into how Telstra is taking a calculated approach toward its AI strategy.

Telstra has strategically positioned AI at the core of its operations, leveraging the technology across a plethora of applications with an impressive tally of 380 identified use cases. These use cases range from enhancing test processes and quality assurance to streamlining customer migration and architecture assurance. Such widespread adoption highlights the tech giant’s commitment to improving productivity and reducing costs through innovative solutions.

Despite the promising potential of AI technologies, Ackland raised a cautionary note during the half-year results presentation. “There is a risk here that you end up in software licensing, cloud costs, and in paying the AI providers so that you offset your benefits,” he stated. His concern underscores a vital consideration that businesses must confront in the process of AI implementation: the danger of incurring operational costs that eclipse the anticipated returns on AI investments.

In response to these challenges, Telstra has made significant strides in streamlining its cloud expenditures while ensuring that similar efficiencies are realized in its AI deployments. This includes establishing an open architecture approach for modern software utilization, a strategy that allows flexibility in vendor choices and transitions between different large language models (LLMs). As the company prioritizes the management of cloud and AI costs, it aims to enhance both operational efficiencies and overall ROI.

A notable achievement for Telstra is a reported 20% boost in software development productivity, largely attributed to the use of GitHub Copilot. This has enabled the company to minimize code maintenance costs while accelerating its product development timelines. The advent of self-service virtual support agents is a concrete example of the efficiencies gained through AI, providing Telstra with a pathway to reduce operating expenses further.

Addressing the ongoing evolution of its AI initiatives, Telstra’s product and technology group executive, Kim Krogh Andersen, has been vocal regarding the journey ahead. While acknowledging that the AI implementation is still ongoing, he conveyed optimism that the benefits would start to translate into improved customer experiences. However, Andersen echoed Ackland’s sentiments, emphasizing the necessity of solidifying the foundation of its AI strategy to prevent failure. “If we don’t get that foundation right, we will see the run cost of AI outperform the benefits of AI,” he cautioned.

This emphasis on establishing a robust groundwork highlights a critical aspect of AI deployment: without appropriate systems, protocols, and oversight, organizations risk squandering the potential benefits that AI technology promises. The need for vigilance in managing AI-associated costs is not unique to Telstra; it is a recurring theme among companies venturing into the domain of AI.

As Telstra navigates its AI trajectory, it serves as a case study for other businesses contemplating AI integration. Leaders must ponder critical questions related to cost management and efficiency optimization to garner the maximum return on AI investments. Ultimately, the exploration of AI is not merely about implementation; it requires a strategic mindset that balances innovation with fiscal responsibility.

In summary, Telstra’s approach towards its AI investments exemplifies the dual nature of opportunity and caution. By focusing on thorough monitoring and a balanced analysis of costs versus benefits, the company aims to unlock the full potential of AI while mitigating financial risks. As organizations seek to harness the transformative power of AI, the lessons learned from Telstra’s initiatives will be on the forefront of strategic discussions surrounding technology investments.