The $440,000 AI Mistake and the SME AI Revolution

Llew Jury

Welcome back to the AI Intelligence Podcast - with thanks to our sponsor Advancer - The AI Agency. Alright, let’s rip right into it, Ollie. This week’s hot story is that absolute mess with Deloitte and their AI-generated government report. If you missed it, Deloitte copped $440,000 from the Department of Employment and Workplace Relations for a report—but turns out, a sharp-eyed Sydney Uni researcher noticed the whole thing was full of glaring mistakes.

Ollie Carter

Hi Llew and hi everyone! Yeah, and when we say “mistakes,” we’re not talking typos, are we? We’re talking full-on fake quotes, made-up court judgments, references to academic papers that, honestly, don’t even exist. If you remember, we saw something super similar a couple episodes back with that Valiant Finance case study—except this time, it’s on a way bigger stage and with way more money on the line.

Llew Jury

Yes exactly. And let’s be honest: if Deloitte, probably swimming in resources, misses this, what’s gonna happen when a ten-person HR firm tries to roll out the same tech with zero guardrails? I keep thinking, if something like this had slipped through at one of my previous businesses, those clients would have vanished overnight—and rightly so.

Ollie Carter

Yeah, and this isn’t just theoretical damage. IBM dropped a report showing Aussie companies get absolutely hammered on the bottom line if an AI model gets involved in a data breach—we’re talking over a million dollars extra, compared to your run-of-the-mill hack. It makes Deloitte’s refund look like pocket change, really.

Llew Jury

I reckon this is the wake-up call for everyone—AI won’t magically fix your problems, but if you treat it like it’s infallible, you’re just gambling with money you can’t afford to lose. That blind trust in AI output instead of actual human judgment? Huge mistake. If you take away nothing else from this episode, please, for your own sanity, triple-check before you copy-paste anything AI spits out. Humans still need to be in the loop, even if it is a bit old-school.

Ollie Carter

It’s funny, right? People love to think we’re at the dawn of this AI utopia—just push a button, out pops pure gold. But these tools are only as smart as the person checking their work. If you skip that step, even the big guys can look like complete amateurs. It’s a little humbling, really.

Ollie Carter

It sets up the next topic so perfectly: Shadow AI. And I swear, every single business I talk to at the moment is dealing with this—employees using AI tools on the side, uploading who-knows-what into whatever chatbot happens to be the flavour of the month.

Llew Jury

Exactly, and the stats back it up. More than a third of Australian SMEs now use generative AI tools, and about 36% of workers have put confidential data—could be company financials, could be client lists—straight into these public models. No policy, no oversight, just... up into the cloud. It’s a giant risk and it’s happening everywhere, even in the most buttoned-up firms. I know for a fact there is firms that are under pressure with a particular client relationship due to an AI-drafted report ending up, somehow, in the hands of the wrong client. It's a massive loss of trust overnight.

Ollie Carter

I mean, here’s the dilemma: The productivity gains are absolutely real—Microsoft’s touting billions of hours saved. People genuinely want to do a better job faster. But we’re asking them to perform AI gymnastics with no net, right? Businesses need the benefits, but nobody wants to be the person who accidentally leaks salary details or a trade secret.

Llew Jury

Totally. I think at least until we get proper guardrails and some clear policies in place many companies are seeing great benefits from AI but also are needing to super aware of the risks too from staff. It’s just like letting your team install whatever software they want from random corners of the internet. Why would you risk it when the potential fallout is so costly?

Ollie Carter

But you ban it outright, folks will just find ways to sneak around. Better play is to face it head-on: run a quick AI audit, get honest about what’s being used and where, how often and so forth, and set up some basic dos and don’ts. If you create a safe, approved way to use these tools, you get the awesome upside we see—without the nuclear-level downsides.

Llew Jury

Spot on. It’s got to be about balance. Use the tools, absolutely—just not with your head in the sand. Actually, this is kind of where we landed in episode 8, talking about ‘AI debt.’ No shortcuts, no magic bullets. Just practical guardrails so your AI isn’t creating brand-new messes while you’re trying to tidy up the old ones.

Ollie Carter

Alright, let’s switch gears and shout out the folks getting this right. There are heaps of Aussie businesses pulling real wins with AI—and most of the time, they’re starting small. There’s this Melbourne fashion retailer using AI for inventory: less overstock, better sales forecasting, and a bit more time back each week by not staring at spreadsheets. It’s actually lifted their margins without fancy consultants or million-dollar budgets.

Llew Jury

And it’s not all retail. Accountants are smashing through the boring stuff—reconciling bank feeds and prepping tax files—by chucking routine tasks to simple AI. Restaurants are turning AI loose to predict stock needs so they’re not over-ordering lettuce, and plenty of service businesses are letting AI-powered chatbots handle customer support while owners actually get some sleep. We talked about Culture Kings last season: it’s the same idea, just a lot more accessible now.

Ollie Carter

Exactly! And none of these started by trying to replace half their team or overhaul the whole business. I've heard of a café here in Brisbane as a good example—they started with a basic AI tool to track orders during the morning rush. No fancy machine learning, just something that sped up kitchen communications and almost overnight, the error rate on coffees dropped and profits went up. That’s about as practical as it gets. Pick a single pain point, see if AI can solve it, and build from there.

Llew Jury

If there’s a theme here—and I reckon there is, Ollie—it’s “start small.” Find the pebble in the sand and work from there. The huge projects with sky-high budgets and no clear problem? They’re usually the ones we’re reading about in the news... for the wrong reasons. SME wins are coming from laser focus, not big fanfare.

Ollie Carter

Couldn’t agree more. So if you’re listening, pick one problem. Don’t worry about keeping up with Deloitte—just look for those everyday headaches you’d love to automate. That’s where AI really shines. Alright, Llew, should we wrap it up?

Llew Jury

Let’s do it. Cheers for tuning in, everyone. We’ll keep smashing through more of these stories in future episodes, so stick around—the real-world AI wins and the occasional horror story aren’t slowing down. Thanks again, Ollie!

Ollie Carter

Appreciate it, Llew. And we appreciate the support from Advancer - The AI Agency. If you need AI Strategy to understand where AI fits into your business, check out Advancer.com.au! See you all next week—don’t forget to keep those AI experiments bite-sized. Catch ya next time!