Good morning.
KPMG is betting big on generative A.I. The professional services firm is making at least a $2 billion commitment in Microsoft cloud and generative A.I. services over the next five years, which could also potentially boost hiring.
"The speed of change and innovation right now is pretty breathtaking," KPMG U.S. chair and CEO Paul Knopp, tells me. "We think we can generate $12 billion of incremental revenue opportunities across the world in the next several years.” The opportunities could stem from cybersecurity solutions for cloud migration, and innovative applications for optimizing business models, among other areas, Knopp says.
KPMG has been an alliance partner with Microsoft for over 20 years, he says. “We’ve seen an acceleration of activity around both generative A.I. and the cloud, and we've been talking to them about what we can do in the market together,” Knopp explains. “So, the idea is to codevelop solutions that are relevant and important to all three of our businesses—audit, tax, and advisory—and to bring them to market as quickly as possible.”
To do this, KPMG’s global workforce of 265,000 will use Microsoft Cloud and Azure OpenAI Service capabilities. But first, associates will pilot the technologies with select business groups across the organization, and “responsible, ethical, and appropriate protocols” will be developed “around the technology along with governance,” he says.
How will generative A.I. be used in the tax function? “The idea would be to use our data, our insights, in conjunction with all the regulations and laws that are out there, and to create something similar to a ChatGPT-type assistant,” Knopp explains. Clients could use the tool to provide information for tax operations, and make the organization more effective going forward, he says.
With the large language models being developed, KPMG is going to use “our proprietary information, in our own secure environment to provide to our clients that kind of rich content and capability,” Knopp says.
'Create a new future at our firm'
Over the past few months, the prolific acceleration of generative A.I. has garnered both supporters and naysayers calling it hype. What made Knopp embrace the technology?
“We’re already seeing the power of generative A.I. when it's put in a safe, secure environment and when it's developed with responsible protocols and techniques,” he explains. “From my conversations with CEOs, they see generative A.I. as a top priority.”
Knopp told me that later this month, KPMG is releasing the findings of a survey of 200 U.S. executives involved with generative A.I. decision-making for their organizations, with $1 billion in revenue. Three-quarters said it’s the top emerging technology that will impact their business over the next 18 months. And 80% say it will disrupt their industry.
With the increase in generative A.I. applications at KPMG, I asked Knopp how it will impact the need for talent.
“We absolutely see it as an opportunity to help with talent shortages in the market today,” he says. “Companies, and our own organization, will need more talent in the future because of generative A.I. We're going to need more data scientists to accompany the new solutions we deliver to clients,” he says. And generative A.I. is going to enable workers to upskill and rescale to be more productive, he says. “We think generative A.I. is going to create a new future at our firm, and many others, going into the next multiple years.”
And KPMG is doubling down on that bet.
Sheryl Estrada
sheryl.estrada@fortune.com
