How startups can use AI better in 2025

We’re living through a shift as big as the cloud revolution of the early 2010s. But this time, it’s Artificial Intelligence. It’s fast-moving, foundational, and impossible to ignore.

At Stone & Chalk, we work with hundreds of founders who aren’t just using AI to speed up systems, but to rethink entire industries.

In Australia, we’re in a strong position. We’ve got a thriving innovation ecosystem, world-class research, and growing support from government initiatives like the National AI Centre. That puts Aussie startups in prime position to use AI, not just better, but bolder.

Startups thrive under constraints: fewer people, tighter budgets, limited time. That’s exactly what makes them nimble adopters of new technology. While big companies see AI as a way to optimise, startups see the chance to build what’s never existed.

But success with AI isn’t about slapping “AI-powered” on your landing page. It’s about insight, iteration, and knowing exactly how AI can create new value. Here’s how to make that happen.

The AI revolution is here – and it’s not optional

Ignoring AI is like ignoring the internet.

Every modern startup needs to know how AI can reshape their product, their customer experience, and their path to growth. AI is already changing how we search, shop, learn, and work. Just think: when was the last time you searched for something without seeing an AI-driven result?

This shift creates enormous opportunities across sectors – from fintech and cyber to healthtech, agtech, and defence.

At its core, AI is an amplifier. It multiplies human potential. A single engineer, equipped with the right tools, can now achieve what once took a team. That means faster building, testing, and learning – a survival edge in startup life.

While a big bank might spend two years deploying an AI fraud tool, you can build and test one in six weeks – and win on speed, experience, and adaptability.

Say you’re building a fintech product. AI can uncover fraud patterns a human would miss. Or in health, it can flag risk and personalise treatment before a patient even walks in.

The key is to move fast and smart. AI helps you go further, if you’re clear on where you’re going.

The top startups in 2025 won’t just boost efficiency with AI. They’ll ask better questions – ones we couldn’t ask before – and build entirely new solutions around the answers.

Avoiding the AI pivot trap

Here’s a familiar story: a startup chases the hype, pivots to AI, launches a chatbot or workflow tool, and ends up blending into the crowd. They haven’t created new value. They’ve just chased a trend.

We call this the AI Pivot Trap. It’s when founders lead with technology, not insight.

The better path is to start with the problem. What are your users struggling with? What couldn’t be solved before? How does AI let you offer something meaningfully different? Before you pivot or launch, ask:

• Do I truly understand the problem I’m solving?
• Am I building something AI uniquely enables?
• Have I tested this with real customers, in real situations?
• What would a radically better solution look like?

The best AI startups lead with user insight and build from there.

A 3-step framework for startups using AI

We’ve seen hundreds of founders go from idea to impact. The ones who succeed tend to follow a simple pattern:

1. Start with observation

Spend time with users. Watch what’s slow, repetitive, frustrating, or risky. That’s where AI can shine.

In Australia, think local: drought-prone farms, hospital backlogs, mining logistics, Indigenous language preservation. These are complex, data-rich problems, waiting for innovative answers.

Founders who embed themselves in these challenges – rather than assume them – spot opportunities others miss.

2. Build AI-native solutions

Don’t retrofit. You’re not held back by legacy systems – use that to your advantage. Build for AI from day one.

Being AI-native doesn’t just mean using smart tech. It means designing the entire user experience around what AI enables – not just what it replaces.

3. Embrace rapid iteration

AI evolves fast. A model from last year might already be outdated.

Winning startups treat AI like software: ship early, test constantly, and refine quickly. Your MVP doesn’t need to be flawless. It needs to teach you something.

Agility beats perfection – especially with tech that moves this quickly.

How to get involved in Australia’s AI ecosystem

There’s real movement behind AI in Australia.

Across Sydney’s Tech Central, Melbourne’s innovation districts, and Adelaide’s Lot Fourteen (where Stone & Chalk is based), founders are gaining access to:

• AI research labs
• Industry partnerships
• Government-backed programs
• AI demos, workshops, and pitch nights

If you’re a founder, plug in. Talk to researchers. Attend events. Explore pre-trained models from OpenAI, Google Cloud, AWS, and local providers. Experiment with AI tools tailored to your industry.

And keep asking: What can I now do that wasn’t possible before?

Could drones and AI help prevent and manage bushfires more effectively? Could we use AI to preserve Aboriginal and Torres Strait Islander languages through respectful, community-led datasets?

These aren’t future hypotheticals. They’re problems waiting for builders like you.

Final thoughts

AI isn’t a silver bullet, but it is a powerful multiplier.

It won’t solve your problems for you. But in the hands of the right founder, it can accelerate the path to value. And that’s what startups do best.

In 2025, the most successful founders won’t just “use AI.” They’ll understand people – what they need, where they struggle, and how AI can help.

Australia has the ingredients: talent, research, community, and breakthrough examples across defence, agriculture, health, cyber, and finance.

At Stone & Chalk, we see the potential daily. We’re working with founders who are using AI to reimagine what’s possible – then make it real.

So don’t ask if you should use AI. Ask how you’ll use it to solve the right problem, at the right time, with the right people. Because the startups that do that won’t just keep up with the AI wave. They’ll lead it.

Are you ready to build what’s next?