Professional services giant KPMG has been forced to withdraw a report on artificial intelligence after several organisations, including the NHS and Transport for London, said its claims about their AI usage were either untrue or misleading. The report, titled ‘Redefining excellence in the age of agentic AI’, was published in October 2025 and later pulled from KPMG’s websites.
Research group GPTZero identified a number of inaccuracies in the document, which it said were the result of AI hallucinations — instances where a generative AI model fabricates information while appearing confident. In a ironic twist, the professional services firm appears to have used AI to help write a report about AI, without properly verifying the output.
UBS, the UK’s National Health Service, Swiss Federal Railways, and Transport for London all told the Financial Times that the report’s descriptions of their AI deployments were either incorrect or misleading. A KPMG spokesperson said the firm was conducting its own investigation, adding: “We expect all our people to follow our guidelines on the responsible use of AI, including human oversight to validate content and verify independent sources.”
The incident comes just one month after EY withdrew a report on loyalty rewards programmes that had included fake footnotes — also attributed to AI hallucinations. For UK businesses, the episode underscores the risks of relying on generative AI for authoritative reports without rigorous human checks. The UK’s Information Commissioner’s Office (ICO) has previously warned that organisations must ensure accuracy and transparency when using AI, while the EU AI Act imposes strict obligations on deployers of high-risk AI systems, which could include professional services firms using AI to generate client-facing content.
Experts say the KPMG case highlights a growing reputational hazard. Dr. Priya Sharma, a technology ethics researcher at the University of Cambridge, commented: “If a firm that advises others on AI cannot reliably use the technology itself, it erodes trust across the sector. The lesson is that AI is a tool, not a replacement for professional judgement.” For the UK economy, such incidents could slow adoption of agentic AI — systems that can act autonomously — as businesses become wary of legal and reputational liability.