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KPMG published a report titled 'Total Experience: Redefining Excellence in the Age of Agentic AI' in October 2025, which contained 45 citations, only five of which were accurate. Investigations by GPTZero revealed that the report relied on an AI-powered referencing tool that hallucinated titles, authors, and case studies. These fabricated claims have since spread to other media outlets and are being ingested by LLMs, further propagating the misinformation.
In October 2025, KPMG published "Total Experience: Redefining Excellence in the Age of Agentic AI." GPTZero later reported that only five of 45 citations accurately matched their sources, while others contained flawed details. The pattern reportedly suggested an unverified LLM research tool, but the system and extent of AI involvement remain unconfirmed.
Domain classification, causal taxonomy, severity scores, and national security assessments were LLM-classified and may contain errors.
AI systems that inadvertently generate or spread incorrect or deceptive information, which can lead to inaccurate beliefs in users and undermine their autonomy. Humans that make decisions based on false beliefs can experience physical, emotional or material harms
Also classified as
KPMG researchers over-relied on the AI tool, publishing its hallucinated outputs in a global report without performing necessary human verification.
The AI tool failed to perform reliably, hallucinating references and facts due to a fundamental lack of capability in factual verification.
The AI system generated false citations and fabricated case studies, leading to the dissemination of incorrect information in a major professional report.
AI system
Due to a decision or action made by an AI system
Unintentional
Due to an unexpected outcome from pursuing a goal
Post-deployment
Occurring after the AI model has been trained and deployed
The incident was caused by an AI-powered referencing tool unintentionally generating hallucinated citations and fabricated claims while attempting to fulfill a research prompt.
Added categories peak at 3: Substantial (Epistemic Harm, Inferred)
Global consulting firm KPMG published a report containing 40 hallucinated citations generated by an unverified AI research tool. While this led to the spread of misinformation across industry publications and LLM training data, the incident represents a corporate quality control failure rather than a threat to national security, carrying negligible impact across all core security categories.
The AI system acted as a research and writing assistant, designed to augment human capabilities by finding citations and drafting case studies, but it required human oversight and verification that was not properly executed.
Risk Level 3: Limited Risk. The system is an AI-powered referencing and research tool that generates text and citations, falling under the category of AI-generated content which requires transparency obligations so users are aware of its nature.
The AI system was utilized as a writing and research assistant to generate case studies and find supporting citations for the KPMG report.
The report from GPTZero provides a highly detailed, empirical analysis of the specific citations and case studies in the KPMG report, comparing them directly to the real sources and demonstrating clear patterns of LLM hallucination.
KPMG defenders might argue the errors are human formatting issues, but the systematic paraphrasing and fabrication of components strongly point to AI generation.
Technology
LLM Hallucinations
AI tool generated fake references and paraphrased titles.
Tool Over-Compliance
AI tool over-complied with requests to find agentic AI examples.
AI-Generated Content Errors
AI detector showed case studies were likely fully AI-generated.
Data Inputs
Condensed Citation Styles
Shortened endnote formats made source verification difficult.
Historical Data Conflation
Citing older sources that predated agentic AI technology.
Incomplete Reference Data
Lacked real authors, URLs, and standard identifiers.
Human Factors
Lack of Human Verification
No human at KPMG double-checked citations or sources.
Overreliance on AI Tools
Authors accepted AI-generated case studies on faith.
Process and Methods
Deficient Fact-Checking
No validation process for claims before report publication.
Unverified AI Workflows
Use of generative AI for research without quality control.
Poor Source Attribution
Inconsistent formatting and paraphrased titles used.
Management
Prioritizing Speed Over Quality
Publishing reports quickly without checking technical accuracy.
Lack of Quality Standards
No organizational policy against publishing hallucinated citations.
AI system involved
Identified by automated extraction; can differ from the alleged developers above.
