KPMG to spend $100 million on AI partnership with Google Cloud

10:05 am Wednesday, November 20th, 2024

By Kenrick Cai

SAN FRANCISCO (Reuters) – – KPMG said on Wednesday it would spend $100 million over the next four years to bolster its enterprise artificial intelligence services through a partnership with Alphabet’s Google Cloud.

Part of the money will be spent on payments directly to Google, though the majority will be spent on in-house efforts that leverage Google’s products, Steve Chase, vice chair of AI and innovation for KPMG, told Reuters in an interview. That includes developing AI agents and training the firm’s workforce to become proficient with the technology.

While Wall Street waits on the technology industry to demonstrate returns commensurate with the billions in capital expenditure it is pouring into AI, professional services providers have become one of the first business beneficiaries of the technology as large businesses tap accounting and consulting firms for help on implementing AI inside their companies and product offerings.

“We strongly are in the camp that it is moving from [proof of concept] and experimentation to scaling,” Chase said. “We believe that professional services is going through the largest transformation that it will likely ever go through.”

He cited a KPMG poll of business leaders, which found that about 50% of surveyed organizations planned to spend $100 million on AI initiatives over the next 12 months, and about 20% planned to spend at least $250 million.

Bookings for KPMG’s Google Cloud-related services have grown 10-fold over the last two years, Chase said.

In keeping with clients’ demands, KPMG is spreading its bets across cloud providers. In July 2023, the firm announced a $2 billion commitment across five years to expand AI and cloud services via Microsoft.

Google’s president of revenue for its cloud division, Matt Renner, told Reuters the company is emphasizing partnering with consulting firms as part of its cloud growth strategy. The company’s third-quarter earnings beat in October was driven in part by a 35% boost in cloud sales.

Renner predicted that the three major cloud companies — Amazon, Microsoft and Google — and most professional services firms would continue to “grow pretty exponentially together.”

Chase declined to share how much KPMG has invested into its Google Cloud practice to date, but said Wednesday’s tranche was the “largest direct investment commitment” with Google so far.

“We anticipate making additional announcements about additional investments in this area,” he said.

(Reporting by Kenrick Cai in San Francisco; Editing by Sayantani Ghosh and Leslie Adler)