KPMG retracted a high-profile report promoting agentic AI after discovering it was riddled with AI hallucinations, with only 5 of 45 citations verified as legitimate. The incident exposed the reputational risks of publishing AI-generated professional content without rigorous human review. It also raised broader concerns about AI-produced misinformation contaminating information ecosystems when fabricated sources propagate unchecked.
KPMG, one of the world's largest professional services firms, withdrew a published report on AI usage after it was found to contain apparent hallucinations — errors likely introduced by an AI system used in its preparation. The incident highlights a sharp irony: AI proving unreliable as a source of information about AI itself. It adds to a growing list of high-profile cases where AI-generated content has undermined the credibility of professional and institutional outputs.