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Business
Jun 14, 2026
Analyzed by GPT OSS 120B

KPMG Pulls AI Report After Hallucinated Claims Spark Client Backlash

AI Summary
KPMG removed its October 2025 report on agentic AI after multiple clients flagged false claims caused by AI hallucinations. The incident underscores growing concerns over the reliability of AI‑generated consulting content and may prompt tighter oversight across the professional services sector.

KPMG Withdraws ‘Redefining Excellence in the Age of Agentic AI’ Report Over Hallucinated Claims

KPMG has taken down its October 2025 whitepaper titled “Redefining excellence in the age of agentic AI” after several organizations reported that the document contained inaccurate statements about their AI deployments. The inaccuracies were traced to AI‑generated text that hallucinated usage details, a flaw highlighted by the research group GPTZero.

Clients Call Out Misleading AI Usage Assertions

  • UBS – said the report falsely claimed the bank was employing advanced AI solutions.
  • UK National Health Service (NHS) – disputed the report’s portrayal of its AI initiatives.
  • Swiss Federal Railways – refuted claims of AI‑driven operational improvements.
  • Transport for London – labeled the AI usage statements as misleading.

The firms informed the Financial Times that the report’s assertions were either untrue or misleading, prompting KPMG to remove the document while it conducts an internal investigation.

Reputational Risks Outweigh Any Quantifiable Losses

Although no financial figures were disclosed, the episode illustrates how AI‑generated errors can erode client trust and potentially affect future consulting engagements. The incident follows a similar mishap at EY, which withdrew a loyalty‑rewards report after discovering fabricated footnotes and hallucinated content.

Implications for Trust in AI‑Generated Consulting Deliverables

The fallout highlights a broader industry challenge: ensuring human oversight when AI tools are used to draft client‑facing materials. KPMG reiterated its commitment to responsible AI practices, emphasizing mandatory human validation of AI‑produced content.

Future Scrutiny and Stricter Oversight of AI Use in Professional Services

Analysts expect regulators and clients to demand more rigorous AI governance frameworks from consulting firms. Companies are likely to adopt stricter internal guidelines, increase transparency around AI involvement, and implement third‑party audits to prevent similar hallucination‑driven errors moving forward.