Jul 11, 2023 - Economy

Microsoft strikes $2 billion AI partnership with KPMG

Illustration of a brain turning into a computerized image of a brain with two sparks moving around it.

Illustration: Brendan Lynch/Axios

KPMG will invest at least $2 billion over the next five years with Microsoft to co-develop cloud and generative AI tools, the companies announced Tuesday.

Why it matters: Rival consulting giants like PwC and Accenture also have made large-scale commitments toward AI-powered changes.

Details: All of KPMG's businesses — audit, tax and advisory — will be impacted by the products that will be developed through this expanded partnership, KPMG U.S. chair and CEO Paul Knopp tells Axios.

  • KPMG and Microsoft also will work together to train KPMG's 265,000 global employees on how to use AI and the new products to their advantage.
  • Audit and tax teams will be able to more quickly access and interpret regulations by relying on generative AI to sort through large amounts of text.
  • Consultants could test proposals for potential outcomes, such as how a digital strategy or product launch might resonate with a certain market.

What they're saying: "There's no doubt that as you try to optimize the internal workings of an organization, that generative AI is going to help point us in the right direction [of] more effective and efficient ways to do business in the future," Knopp says.

The big picture: Companies across industries have been rushing to demonstrate their embrace of generative AI since OpenAI's ChatGPT stunned the world with its capabilities.

  • Consulting firms have a particular need to show that they have in-house AI prowess.
  • Microsoft is the largest outside investor in OpenAI.

What to watch: Investments into AI are expected to have a huge multiplier effect on future revenue.

  • The market for generative AI enterprise applications alone is expected to grow to $98 billion by 2026, up from an expected $43 billion this year, according to Pitchbook.
  • "We're pretty confident, over the next several years, that we'll create $12 billion of global opportunities for additional revenue for KPMG," adds Knopp.

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