On November 30th, 2022, Chat GPT was released to the public. Ever since then, all industries from technology to finance to education have had to grapple with the new technology generically called generative Artificial Intelligence (AI). These organizations have had a variety of responses.
Some organizations, specifically high schools and universities have gone for total banning of the new technology. Seton Hall Prep, the feeder high school associated with this publication’s host University, Seton Hall University, has instituted a new anti-AI policy, banning all uses of AI technology in classes. The reasoning being that students would be able to use the technology to behave in an academically dishonest fashion.
Other industries, like high level tech and finance firms, cannot afford to ignore the powerful technology. For months following the release of ChatGPT, professionals working for these firms were using the Open Source site freely to increase the effectiveness of their job. However, a string of scandals in early 2023 made the management of these firms rethink the safety of this practice. For example, in May of 2023, a sample of Samsung propriety code for a new product was leaked after a user was able to identify a prompt inputted in ChatGPT and released it to the public. Situations like this demonstrated that while generative AI is going to be essential to remaining competitive in the modern-day markets, utilizing an open source platform exposes the firm to unprecedented risk for data theft.
While other industries grapple with this conundrum, the accounting industry seems to be a few steps ahead. In mid-July of 2023 one of the titans of the industry, a firm part of a group considered colloquially as the Big 4, KPMG unveiled a new partnership with Microsoft. The Dutch-originated accounting firm committed a multiple billion dollars over 5 years to the New Mexico-originated tech firm to build out their in-house AI platforms. This includes building out their already-operational TaxGPT, a platform that utilizes generative AI to answer complex tax questions for staff and clients. It also involves building out a streamlined Audit and Advisory platform that utilizes AI technologies.
In response to this announcement, Ernst and Young (EY), another “Big 4” accounting firm, announced their own private AI platform. They committed a total of $2.5 billion investment over 4 years to build their own competing assurance AI platform. The new platform aims to process over 680 billion lines of financial data, a goal that will hopefully keep them at the front as the leading accounting firm in terms of gross revenue by growing the $14.4 billion of Audit revenue the firm pulled in during 2022.
It is clear that generative AI has rocked the business world. As the technology shakes up the business world, it will be up to responsible and forward-thinking business managements to adopt the technology in a safe but effective way. In these two trend-setting investments, the accounting industry has laid the groundwork for the future implementation of this technology. Investors should look to these examples as expectations for the companies that they hold in their portfolios.
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