KPMG Withdraws AI Report After Fabricating Case Studies

KPMG has withdrawn its AI business report, "Redefining excellence in the age of agentic AI," after GPTZero discovered it contained fabricated case studies about firms like UBS and the UK's NHS. The incident, blamed on sloppy AI-powered sourcing dubbed "vibe citing," damages KPMG's credibility in selling AI services and highlights the risk of "secondary hallucinations," where false but credible-looking information spreads.

KPMG report fabrications

• ▪The KPMG report made false claims about AI implementation at UBS, the UK's NHS, Swiss Federal Railways, and Transport for London.
• ▪KPMG published and later withdrew an AI report, "Redefining excellence in the age of agentic AI," that contained fabricated case studies.
• ▪The errors in KPMG's AI report were first uncovered by GPTZero and subsequently verified by the Financial Times.
• ▪All organizations named in the KPMG report's case studies disputed the claims made about them.

Secondary hallucination risk

• ▪GPTZero CEO Edward Tian warned that flawed reports from major consulting firms can spread "secondary hallucinations."
• ▪"Secondary hallucinations" occur when credible-seeming but false reports are recycled by both AI systems and humans.

Vibe citing problem

• ▪GPTZero describes the report's sourcing issues as "vibe citing."
• ▪In some cases, the KPMG report's citations had no matching original source at all.
• ▪The issue of "vibe citing" also affects Google's AI Overviews, for which a German court recently ruled Google liable.
• ▪GPTZero identified sloppy sourcing in the KPMG report, suggesting careless use of AI search as a potential cause.
• ▪The report's citations were often loose paraphrases of real sources, with some missing URLs or correct authors.

KPMG reputation damage

• ▪The report's flaws demonstrated that KPMG could not properly handle the AI technology it sells to clients.
• ▪The incident is considered embarrassing for KPMG as it involved the firm spreading misinformation.

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