KPMG Using Generative AI for Its Clients To Pick High Growth Startups for Investment and Acquisition

One of the Big Four accountant & advisory firms KPMG is among those using the latest Artificial Intelligence (AI) tools to advise clients and help guide their dealmaking, said a report by Financial Times (FT) . 

With investors under pressure to identify the next high-growth start-up, Venture capital funds, private equity groups and accountancy firms are reportedly using generative Al for tasks such as assessing a company's growth potential based on financial analysis.

KPMG has used generative AI to create a system based on its own data to help advise its staff. According to the FT report, KPMG said the AI tool had seen high take-up over the course of the month it was in use, adding that recent advances in AI had made it “practically useful . . . particularly in M&A".

Venture Capital firms are using the latest artificial intelligence to pick acquisition targets and start-ups for investment.

In early of last month, KPMG announced in a press release that it is deploying a series of generative AI investments and alliances to empower its workforce, further advance cutting-edge client solutions. The 125-years-old company further said that in the coming months, virtually all client service delivery models will have built-in, generative AI and machine learning capabilities combined with enhanced analytics integrated with firm data sets and solutions – all within the firm's secure cloud environment to protect client and firm data.

New York-based Hedge fund Coatue and venture capital firm Headline are also among list of those using the technology behind ChatGPT to help advice its clients.

PitchBook's AI-driven "VC exit predictor" evaluates how likely a company is to go public or get acquired. The data provider has claimed that the two-month-old tool had a 75% accuracy rate.

Another VC firm Moonfire used AI to review about 50,000 companies. London-based Moonfire Ventures, launched in 2020 by former Atomico co-founder Mattias Ljungman, have used generative AI to assess and compare investment targets.

The increased use of AI in investment is a growing concern raising questions of depleting the participation of human in the sector. Industry analyst group Gartner has estimated that AI and data analytics will inform more than three-quarters of venture capital and early-stage investments by 2025.