Observed Signal · Jun 14, 2026 · Retraction · Source: t3n · Impact: 3/5 · Sentiment: Negative
KPMG Withdraws AI-Agents Report Over Hallucinated Case Studies
KPMG has withdrawn an October report titled "Exzellenz im Zeitalter agentischer KI neu definieren" after it was found to contain hallucinated case studies and false claims about organizations including UBS, the Swiss Federal Railways (SBB) and the UK National Health Service. UBS and SBB told the Financial Times the report’s statements about their use of AI agents were factually incorrect, prompting KPMG to remove the paper from multiple websites and launch an internal investigation. The episode follows a recent EY retraction for fabricated data and nonexistent citations. Independent detector GPTZero flagged the KPMG report’s hallucinations, and separate academic research has identified tens of thousands of fake citations in published papers, underscoring growing concerns about AI-generated misinformation and the reputational and practical risks of unverified AI‑sourced content.
Major global consultancies published and then retracted AI-driven reports with fabricated case studies, highlighting credibility and verification risks for AI outputs used to inform enterprise decisions; this affects trust in AI research and advisory services used across industries.
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Key Takeaways & Evidence Grounding
- KPMG withdrew its October report "Exzellenz im Zeitalter agentischer KI neu definieren" after it included hallucinated case studies.
- The report made false claims about UBS, the Swiss Federal Railways (SBB), and the UK National Health Service (NHS); UBS and SBB said those claims were not correct.
- KPMG said it is investigating the circumstances of the publication and reaffirmed policies requiring human review and independent source verification.
- GPTZero identified the hallucinations in the KPMG report; separately, researchers from Cornell University and the University of California found nearly 150,000 fabricated citations across 2.5 million scientific articles.
- Consultancy EY also recently retracted a study for fabricated data, misattributed quotes, and citing a McKinsey report that does not exist.
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Related Market Signals & Shifts
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KPMG Withdraws AI Report After Hallucination Errors
KPMG has removed a report titled "Redefining excellence in the age of agentic AI" after research group GPTZero and several organisations flagged factual inaccuracies the report attributed to their AI use. The report, originally published in October 2025, was found to contain errors that GPTZero and the Financial Times said likely stemmed from AI hallucinations. UBS, the UK’s National Health Service, Swiss Federal Railways and Transport for London told the FT the report’s claims about their AI usage were incorrect or misleading. KPMG said it pulled the document from its websites while it conducts an internal investigation and reiterated its guidelines requiring human oversight of AI-generated content. The article notes a similar recent withdrawal by EY over AI-related errors.
Three Examples of AI Hallucinations in 2026
Gary Marcus published an opinion post on Substack (June 12, 2026) highlighting three recent examples of generative AI 'hallucinations.' The piece references an Anne Applebaum X post that calls out a KPMG report whose business case studies reportedly contained AI-generated fabrications, and cites follow-ups from 404 Media and a submission from Valerio Capraro as additional instances. Marcus uses these cases to illustrate ongoing gaps between the capabilities and the claimed reliability of contemporary large language models. The article is commentary rather than a technical or investigative report and appears on Marcus’s Substack newsletter.
Researcher Made Chatbots Warn About Fake Disease
Swedish researcher Almira Osmanovic Lindström created a fictional eye disease called “Bixonimanie” and seeded false information via Medium posts and fake preprint studies to demonstrate how AI systems acquire and propagate knowledge. Large language model–based chatbots — including Microsoft’s Copilot, Perplexity AI and OpenAI’s ChatGPT — subsequently hallucinated details about the invented disease and warned users as if it were real. Some academic works even cited the fabricated studies; a paper in Cureus published in November 2024 was retracted at the end of March 2026. After Nature reported on the experiment, the Medium posts and the preprint entries were removed. Experts have raised alarms about how easily misinformation can enter LLM training and downstream conversational interfaces.
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