Deloitte's AI debacle in Australia isa warning for all early adopters

That a report riddled with AI hallucinations was sent to a government should be a wake-up call

- ATANU BISWAS

An AI fiasco in an Australian project by Deloitte raises the question of whether the global consultancy industry is being left vulnerable by its use of artificial intelligence.

Deloitte was commissioned by Australia’s Department of Employment and Workplace Relations (DEWR) last December to carry out an “independent assurance review” of its ‘targeted compliance framework,’ an automated system that penalizes jobseekers who failed to meet their ‘mutual welfare’ obligations. The contract was worth around US $290,000. A researcher from Sydney University, Chris Rudge, observed that Deloitte's 237-page report, which was submitted in July, was riddled with references to nonexistent sources and experts.

After examining it, Deloitte confirmed that some of its footnotes and references were inaccurate and acknowledged using Azure OpenAI GPT-40, a generative AI system, to produce parts of the report. The fabricated quotes and references were snipped out and an amended report was submitted in September. Deloitte also agreed to partially refund its consulting charge.

Fabricated references by GenAI arise from the hallucinations that AI tools are found to suffer. Examples abound of AI falsehoods. Shortly after ChatGPT's launch, Samantha Delouya of