Should tax and accounting professionals be concerned with AI)? Will AI like ChatGPT eliminate demand for CPAs? Why or why not. Include in your response a discussion of how CPAs can stay relevant in a world of AI and a hypothetical client fact pattern in which a CPA can provide differentiated skills as compared to AI.

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KPMG Plans $2 Billion Investment in AI and Cloud Services

Expanded partnership with Microsoft is expected to bring in $12 billion in revenue for KPMG over five years, the Big Four accounting firm says

KPMG plans to invest $2 billion in artificial intelligence and cloud services across its business lines globally over the next five years through an expanded partnership with Microsoft, the latest move by a Big Four accounting firm to double down on the technologies.

The professional-services company on Tuesday said it expects the partnership to bring in more than $12 billion in revenue over five years. Annually, that would represent about 7% of KPMGs global revenue, which totaled $34.64 billion in the year ended Sept. 30, 2022. The company, the smallest of the Big Four by revenue, declined to provide a projected revenue figure for the year ending this September.

Through the new investment, the roughly 265,000-person company will further automate aspects of its tax, audit and consulting services, aimed at enabling employees to provide faster analysis, spending more time on doling out strategic advice and helping more companies integrate AI into their operations.

Microsoft declined to comment on the investment it is making in the partnership.

KPMGs global chair and chief executive, Bill Thomas, said in an interview that the company isnt looking to use technology to eliminate jobs, but rather to enhance its workforce with AI skillsfor example, by moving people to new roles or offering them training.

I certainly dont expect that well lay off a lot of people because weve invested in this partnership, Thomas said. 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 cant even imagine yet.

As part of the expanded partnership, KPMG will have early access to an AI assistant called Microsoft 365 Copilot, before its launch to the general public. KPMGs deal with Microsoft also includes the Azure cloud platform, through which the professional-services company already uses OpenAI to build and run apps. Microsoft has a partnership with OpenAI, the startup behind the viral ChatGPT chatbot, which made generative AI a household word.

Thomas said a significant portion of KPMGs investment will go toward generative AI, which many businesses are eager to apply to their finances as a way to cut costs and yield new efficiencies.

For example, the technology will allow KPMG to strengthen its work related to environmental, social and governance issues by unifying massive data sets for tax reporting, analyzing potential ESG-related transactions and performing data analysis for audits in a more timely fashion, Microsoft CEO Satya Nadella said in an interview.

Whether its ESG reporting or audit, all of these things are going to be fundamentally transformed because the core processes of those knowledge workflows are going to be accelerated using this AI technology, Nadella said.

The move comes as KPMG and other companies are navigating slowing growth in their consulting businesses as corporate clients spend less on certain services amid recession concerns. Its U.S. unit in June laid off almost 2,000 employees, four months after cutting nearly 700 in its consulting division.

Over the past decade, KPMG has been applying AI in various forms, initially to help clients eliminate bias in decision-making. KPMG in 2019 pledged to shell out $5 billion on general technology over five years, which included partnerships with Microsoft and other providers. Of the $5 billion, KPMGs investment with Microsoft during that period comprised 20%, or $1 billion. The rest involved things such as the moving to the cloud, KPMG said.

The other Big Four firms in recent years have invested billions of dollars in cloud-based and other technologies to strengthen their audit, consulting and tax businesses. They also have turned to Microsoft for AI offerings, their websites show.

PricewaterhouseCoopers in April said it planned to invest $1 billion in generative AI in its U.S. operations over a three-year period, also in partnership with Microsoft. Deloitte last December said it was spending $1.4 billion on employee training on technologies including AI. Ernst & Young said last year that it devoted $1 billion to building out its audit technology capabilities, including AI, for the next four years. Outside of the Big Four, consulting company Accenture last month announced a $3 billion investment in data and AI over three years.