KPMG Invests USD 2B in AI Cloud, Expands Microsoft Partnership

Highlights:

• With the strengthened collaboration, KPMG will be among the first organizations to access the AI assistant, Microsoft 365 Copilot, prior to being available to the public.
• According to KPMG, the five-year alliance will bring in an additional USD 12 billion in income.

KPMG LLP, a professional services organization, will invest two billion dollars in cloud services and artificial intelligence over the next five years to expand its cooperation with Microsoft Corp.

The investment will enable personnel to execute quicker analysis while assisting the roughly 265,000-person corporation in automating several tax, audit, and advisory services. As per KPMG, this will enable the company to spare more time to offer strategic advice to the customers and help them integrate AI into their regular business operations.

In an interview with the Wall Street Journal, KPMG Chairman and Chief Executive Bill Thomas stated that the company’s goal with AI is to improve the capabilities of its team rather than to replace existing positions. He said that any employee whose role may be performed by AI will be offered training or transferred to a different position.

“I certainly don’t expect that we’ll lay off a lot of people because we’ve invested in this partnership. I would expect that our organization will continue to grow, and we will reskill people to the extent possible and, frankly, create all sorts of opportunities in ways that we can’t even imagine yet,” added Thomas.

With the strengthened collaboration, KPMG will be among the first organizations to access an AI assistant, Microsoft 365 Copilot, prior getting available to the public. Also, the company can add more workloads to the Azure cloud platform.

KPMG has already used Azure to leverage OpenAI service to develop and execute its AI applications. Because Microsoft also has a collaboration with OpenAI LP, the company behind the ChatGPT chatbot that made generative AI popular, the OpenAI Service is only available through Azure.

According to KPMG, the five-year alliance will bring in an additional USD 12 billion in income. In the most recent fiscal year, which ended on September 30, 2022, the company generated USD 34.64 billion in yearly revenue. The corporation is the smallest of the so-called “big four accounting firms,” including PricewaterhouseCoopers International Ltd., Deloitte Touche Tohmatsu Ltd., and Ernst and amp; Young Global Ltd.

In 2019, KPMG and Microsoft agreed to a multiyear collaboration. Since then, KPMG has integrated AI into many facets of its operations, enabling clients to make decisions by discarding bias in the process. With the agreement made, Thomas said, it will increase its usage of AI, with a sizable percentage of its investment going towards generative AI. He said companies are ready to embrace generative AI technology to save costs and boost operational effectiveness.

Additionally, generative AI will be used by KPMG to enhance its work on environmental, social, and governance challenges. The technology can aid in unifying big datasets for tax reporting and analyzing transactions pertaining to ESG. Microsoft’s CEO Satya Nadella told The Wall Street Journal that it could also assist in data analysis for audits.

The accounting firm has witnessed sluggish development in its consultancy division as clients spend less on its services due to economic concerns. KPMG’s investment comes at a challenging time for the accounting firm. Its US branch reported in June that it would be letting go of around 2,000 employees.

The other major accounting firms have joined Microsoft and invested similarly in cloud and AI technologies to bolster their advising, tax, and auditing operations. In December, Deloitte announced it would spend USD 1.4 billion training staff members in new technologies, including AI. In April, the company intended to launch a new generative AI practice.

PricewaterhouseCoopers said in April that it is collaborating with Microsoft and investing one billion dollars in generative AI technologies over three years. Ernst and amp; Young, however, revealed last year that it would invest one billion dollars to improve its audit technology capabilities using AI and other technologies. Accenture Plc, a significant consulting company, announced this month that it would spend USD three billion over the following three years on data and AI. Additionally, it disclosed extended collaborations with Google Cloud, Amazon Web Services Inc., and the other two significant public cloud service providers, Microsoft and Oracle.