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Deloitte’s AI hallucination-filled report raises challenge for consultants

Professional services firms’ reliance on AI has also coincided with a hollowing out of lower-level consultants -- who would traditionally ensure the quality of the reports, experts have said.

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At the beginning of October 2025, Australia discovered that the strategic report commissioned by the Department of Employment and Workplace Relations (DEWR) to Deloitte contained major errors, invented citations and non-existent academic references. Artificial intelligence, employed through a generic Azure OpenAI GPT-4o model, was directly challenged. The federal government, embarrassed by the magnitude of the scandal, demanded accounts and obta…

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Sydney Morning Herald broke the news in Sydney, Australia on Tuesday, October 7, 2025.
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