Beyond Prompting: Measuring the Generational AI Gap

AI adoption is widespread, but capability is still catching up. While 84% of workers have used an AI tool, only 7% show advanced literacy and more than half remain beginners. There’s also a generational divide: younger workers may be overconfident and at higher risk of misuse, while older workers often show stronger judgement but are slower to adopt. Lifting AI literacy across all ages is essential to unlocking its full value.

AI adoption is widespread, but capability is still catching up. While 84% of workers have used an AI tool, only 7% show advanced literacy and more than half remain beginners. There’s also a generational divide: younger workers may be overconfident and at higher risk of misuse, while older workers often show stronger judgement but are slower to adopt. Lifting AI literacy across all ages is essential to unlocking its full value.

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This year’s report examines the rise of AI in Australian workplaces, generational gaps in AI literacy, and opportunities to strengthen workforce capability, including:

Younger workers are twice as likely to overstate their skills, increasing the risk of misuse, poor evaluation, or ethical lapses without clear guidance.
Older workers hold many senior roles—upskilling them boosts both individual literacy and organisational adoption of AI.
Designing AI training with generational differences in mind maximises benefits for employees and the broader organisation.
Closing the AI literacy gap requires more than technical skills. It also demands critical thinking, ethical awareness, and strategic use to avoid outpacing workers’ judgment.

“The misuse of AI tools can lead to inaccurate outputs, the unintended sharing of sensitive information, or contractual breaches. 95% of respondents reported experiencing AI-related incidents over the past two years, with around 77% reporting direct financial losses averaging $800,000 per company.

AI is here. Are businesses moving fast enough to unlock its value?

have advanced AI skills; over half are still beginners

unlocked if half of beginners reach intermediate AI literacy

gained by closing the AI literacy gap between boomers and millennials

more earned yearly by workers with advanced vs beginner AI skills

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RMIT University acknowledges the people of the Woi wurrung and Boon wurrung language groups of the eastern Kulin Nation on whose unceded lands we conduct the business of the University. RMIT University respectfully acknowledges their Ancestors and Elders, past and present. RMIT also acknowledges the Traditional Custodians and their Ancestors of the lands and waters across Australia where we conduct our business - Artwork 'Sentient' by Hollie Johnson, Gunaikurnai and Monero Ngarigo.

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Acknowledgement of Country

RMIT University acknowledges the people of the Woi wurrung and Boon wurrung language groups of the eastern Kulin Nation on whose unceded lands we conduct the business of the University. RMIT University respectfully acknowledges their Ancestors and Elders, past and present. RMIT also acknowledges the Traditional Custodians and their Ancestors of the lands and waters across Australia where we conduct our business.

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