The Western Australian government is pursuing expedited cost recovery from Deloitte after a $166,000 feasibility study on merging the University of Western Australia, Curtin University, and Murdoch University contained AI-hallucinated references and calculation errors totalling hundreds of millions of dollars. The appendix figures described for the Curtin-UWA high-cost scenario are $514m to day 1 plus $145m post-day-1 over five years, which sum to $659m; if the report stated $399m as the total, that was a $260m error. "Deloitte is not doing the consulting industry any favours. Clients are starting to ask questions not every firm is ready to answer. Once again, a Deloitte report for an Australian government turns out to contain AI hallucinations and other inaccuracies. This time the government is seeking a refund on the US$117,000 it paid. Last year Deloitte refunded around US$68,000 to the federal government over a similar report. The damage to Deloitte’s reputation, and to trust in consulting reports more broadly, will far exceed both amounts. The government says it has been advised the errors don’t change the report’s findings, and that may be correct. But a client who finds one made-up reference will start questioning every other number in the report. In our conversations with consulting Partners, several have told us their clients now ask which AI tools they use and how. After news like this, expect that question to come up more often. The answer clients want to hear is about rigour: every number traced back to its source, and a clear record of who checked it. Tools that chase efficiency at the expense of accuracy and accountability make that answer harder to give." - From Facticity.AI and Erik Ligtenberg on LI; see sources in the comments.

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