KPMG launches Silicon Valley-style incubator to boost AI innovation

KPMG's vice chair and head of CT&I, Todd Lohr, stated that the new division will operate separately from the firm's core audit, tax, and advisory lines. This structure aims to overcome the inherent bureaucracy of a partnership model, where major changes typically require extensive voting. The launch of public AI tools like ChatGPT prompted KPMG's leadership to recognize the need for a faster approach to innovation. The CT&I group will provide staff with more autonomy to build new businesses, hire specialized talent, and sign contracts more quickly, all while remaining within KPMG's risk and governance framework. Additionally, the firm plans to rotate promising employees into CT&I to gain "founder-style" experience, equipping them with skills for the AI era.

This initiative by KPMG is part of a larger trend in the consulting industry, where AI has spurred the growth of agile startups and led some senior professionals to leave traditional firms for faster-paced environments. These AI-powered startups aim to deliver strategy work more rapidly and cost-effectively. KPMG aims to counter this by leveraging its established advantages, such as access to large clients, industry expertise, and a broad knowledge base, and combining them with startup-like speed. Lohr expressed that the firm should not allow smaller competitors to disrupt it, and CT&I is designed to foster a spirit that can "go head-to-head" with such disruptive forces.

KPMG's leadership has been actively engaging with Silicon Valley through regular management committee meetings on the West Coast to gain exposure to Big Tech, AI companies, and startups, which has informed the desired culture shift. Competitors like Deloitte, EY, and PwC have also implemented structural changes to enhance their technology and AI capabilities. Lohr remains optimistic about the future of traditional consulting, believing that the increasing need for AI implementation will drive further demand for consulting services.