KPMG pulls report on AI usage due to apparent hallucinations

KPMG, a global professional services firm, pulled its report on AI usage. The report, titled "Redefining excellence in the age of agentic AI," was published in October 2025. Research group GPTZero identified numerous inaccuracies in the report, which claimed that several organizations were using AI in ways that they were not. Organizations such as UBS, the UK's National Health Service, Swiss Federal Railways, and Transport for London denied the report's claims about their AI usage.

The inaccuracies in the report were attributed to AI hallucinations, which occur when AI systems generate false or misleading information. This phenomenon has raised concerns about the reliability of AI-generated content and the need for human oversight to validate information. KPMG's decision to pull the report is a significant step in acknowledging the potential risks of relying on AI-generated content without proper verification.

The incident has sparked a wider debate about the use of AI in research and reporting. As AI technology becomes increasingly sophisticated, it is being used more widely in various fields, including business, academia, and journalism. However, the potential for AI hallucinations and other errors highlights the need for careful consideration and scrutiny of AI-generated content.

KPMG's spokesperson stated that the firm expects all its employees to follow guidelines on the responsible use of AI, including human oversight to validate content and verify independent sources. The firm has removed the report from its websites while conducting its own investigation into the matter. This move demonstrates a commitment to accuracy and transparency, which is essential for maintaining trust in the firm's research and reports.

The implications of this incident extend beyond KPMG and the organizations mentioned in the report. It highlights the potential risks of relying on AI-generated content without proper verification and the need for human oversight to ensure accuracy. As AI technology continues to evolve, it is crucial to develop and implement effective measures to mitigate these risks and ensure that AI-generated content is reliable and trustworthy.

In recent months, there have been several instances of AI-generated content being used in reports and research without proper verification. Last month, EY withdrew a report on loyalty rewards programs that appeared to include fake footnotes and AI hallucinations. These incidents demonstrate the need for greater awareness and understanding of the potential risks and limitations of AI-generated content.

The use of AI in research and reporting can bring many benefits, including increased efficiency and speed. However, it is essential to recognize the potential risks and take steps to mitigate them. This includes implementing robust verification processes, providing training on the responsible use of AI, and promoting a culture of transparency and accountability.

As the use of AI technology becomes more widespread, it is crucial to develop and implement effective measures to ensure the accuracy and reliability of AI-generated content. This will require a collaborative effort from organizations, researchers, and regulators to establish clear guidelines and standards for the use of AI in research and reporting.

In conclusion, the incident involving KPMG's report on AI usage highlights the potential risks of relying on AI-generated content without proper verification. It emphasizes the need for human oversight, transparency, and accountability in the use of AI technology. As AI continues to evolve, it is essential to prioritize accuracy, reliability, and trustworthiness in AI-generated content to maintain the integrity of research and reporting.