KPMG Creates New AI Unit Reporting Directly to CEO

KPMG is restructuring its approach to artificial intelligence by consolidating its scattered innovation and AI functions into a single, high-level unit. This new division, known as Client Technology & Innovation, will not sit within the usual middle management hierarchy. Instead, it will report directly to the firm’s chief executive, a structural move intended to accelerate the development of new AI-driven services.

The reorganization, effective October 1, places Todd Lohr, a 15-year veteran of the firm, in charge as vice chair. According to Fortune, Lohr has advocated for this direct reporting line for several years, arguing that transformative change requires bypassing standard committee structures. The move coincides with the retirement of Steve Chase, the outgoing global head of AI and digital innovation, marking a significant shift in how the Big Four firm manages its technological future.

Bypassing traditional management layers

The primary goal of this new structure is to treat AI not just as a technical upgrade, but as a core business driver. By placing the division directly under CEO Tim Walsh, KPMG aims to keep AI strategy at the top of the agenda. This allows the firm to react more quickly to market shifts and develop products that challenge its own traditional service models, rather than just offering consulting advice on technology.

Lohr describes the new unit as an internal venture studio, taking design cues from Silicon Valley incubators. His background includes co-founding a financial services startup and leading KPMG’s technology partnerships. This experience is seen as crucial for navigating the complexities of building new digital businesses within a large, established professional services firm.

Building new commercial structures

The new division has four main pillars, including product strategy, commercial infrastructure, and firmwide AI strategy. A key component is an incubation arm that will develop "edge disruption plays." These are new business concepts designed to be launched quickly with different capital structures and exit paths, such as being spun out with outside investors or folded back into KPMG’s core operations.

This approach requires new go-to-market strategies and deal structures that differ significantly from the firm’s historical methods. By integrating existing partnerships with major tech companies like Microsoft, Google Cloud, and OpenAI into this single mandate, KPMG aims to create a more cohesive ecosystem. This consolidation is intended to streamline decision-making and ensure that all AI-related initiatives work together toward a common commercial goal.

Balancing speed and stability

However, this rapid reorganization presents inherent trade-offs. Consolidating functions under a new leadership structure may create short-term friction as teams merge and reporting lines change. The departure of the previous global head of AI also raises questions about continuity in existing international mandates. While the goal is to move at start-up speed, the firm must still navigate the complex regulatory and operational realities of a global audit and advisory practice.