ai

Deloitte’s AI blunder: A costly lesson in consultancy business

Deloitte has agreed to refund the Australian government the full amount of $440,000 after acknowledging major errors in a consultancy report concerning welfare mutual obligations. These errors were the result of using AI tools, which led to fabricated content, including false quotes related to the Federal Court case on the Robodebt scheme and fictitious academic references.

That incident underscores the challenges of deploying AI in crucial government consultancy projects without sufficient human oversight, raising questions about the credibility of government policy decisions influenced by such flawed reports.

In response to these errors, Deloitte has publicly accepted full responsibility and committed to refunding the government. The firm is re-evaluating its internal quality assurance procedures and has emphasised the necessity of rigorous human review to maintain the integrity of consultancy projects that utilise AI.

The situation has prompted the government of Australia to reassess its reliance on AI-generated content for policy analysis, and it is currently investigating the oversight mechanisms to prevent future occurrences. The inaccuracies in the report had previously swayed discussions on welfare compliance, thereby shaking public trust in the consultancy services employed for critical government policymaking.

The broader consultancy industry is feeling the ripple effects, as this incident highlights the reputational and financial dangers of unchecked AI outputs. As AI becomes more prevalent for its efficiency, this case serves as a stark reminder of its limitations, particularly in sensitive government matters.

Industry pressure is growing for firms to enhance their quality control measures, disclose the level of AI involvement in their reports, and ensure that technology use does not compromise information quality. The Deloitte case adds to ongoing discussions about the ethical and practical integration of AI into professional services, reinforcing the imperative for human oversight and editorial controls even as AI technology progresses.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot! 

AI transforms retinal scans into predictive health tools

AI and machine learning are transforming ophthalmology, making retinal scans powerful tools for predicting health risks. Retinal images offer a non-invasive view of blood vessels and nerve fibres, showing risks for high blood pressure, kidney, heart, and stroke-related issues.

With lifestyle-related illnesses on the rise, early detection through eye scans has become increasingly important.

Technologies like fundus photography and optical coherence tomography-angiography (OCT-A) now enable detailed imaging of retinal vessels. Researchers use AI to analyse these images, identifying microvascular biomarkers linked to systemic diseases.

Novel approaches such as ‘oculomics’ allow clinicians to predict surgical outcomes for macular hole treatment and assess patients’ risk levels for multiple conditions in one scan.

AI is also applied to diabetes screening, particularly in countries with significant at-risk populations. Deep learning frameworks can estimate average blood sugar levels (HbA1c) from retinal images, offering a non-invasive, cost-effective alternative to blood tests.

Despite its promise, AI in ophthalmology faces challenges. Limited and non-diverse datasets can reduce accuracy, and the ‘black box’ nature of AI decision-making can make doctors hesitant.

Collaborative efforts to share anonymised patient data and develop more transparent AI models are helping to overcome these hurdles, paving the way for safer and more reliable applications.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Anthropic’s Claude to power Deloitte’s new enterprise AI expansion

Deloitte entered a new enterprise AI partnership with Anthropic shortly after refunding the Australian government for a report that included inaccurate AI-generated information.

The A$439,000 (US$290,618) contract was intended for an independent review but contained fabricated citations to non-existent academic sources. Deloitte has since repaid the final instalment, and the government of Australia has released a corrected version of the report.

Despite the controversy, Deloitte is expanding its use of AI by integrating Anthropic’s Claude chatbot across its global workforce of nearly half a million employees.

A collaboration will focus on developing AI-driven tools for compliance, automation and data analysis, especially in highly regulated industries such as finance and healthcare.

The companies also plan to design AI agent personas tailored to Deloitte’s various departments to enhance productivity and decision-making. Financial terms of the agreement were not disclosed.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

India’s competition watchdog urges AI self-audits to prevent market distortions

The Competition Commission of India (CCI) has urged companies to self-audit their AI systems to prevent anti-competitive practices and ensure responsible autonomy.

A call came as part of the CCI’s market study on AI, emphasising the risks of opacity and algorithmic collusion while highlighting AI’s potential to enhance innovation and productivity.

The study warned that dominant firms could exploit their control over data, infrastructure, and proprietary models to reinforce market power, creating barriers to entry. It also noted that opaque AI systems in user sectors may lead to tacit algorithmic coordination in pricing and strategy, undermining fair competition.

The regulatory approach of India, the CCI said, aims to balance technological progress with accountability through a co-regulatory framework that promotes both competition and innovation.

Additionally, the Commission plans to strengthen its technical capacity, establish a digital markets think tank and host a conference on AI and regulatory challenges.

A report recommended a six-step self-audit framework for enterprises, requiring evaluation of AI systems against competition risks, senior management oversight and clear accountability in high-risk deployments.

It also highlighted AI’s pro-competitive effects, particularly for MSMEs, which benefit from improved efficiency and greater access to digital markets.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Italy passes Europe’s first national AI law

Italy has become the first EU country to pass a national AI law, introducing detailed rules to govern the development and use of AI technologies across key sectors such as health, work, and justice.

The law, approved by the Senate on 17 September and in effect on 10 October, defines new national authorities responsible for oversight, including the Agency for Digital Italy and the National Cybersecurity Agency. Both bodies will supervise compliance, security, and responsible use of AI systems.

In healthcare, the law simplifies data-sharing for scientific research by allowing the secondary use of anonymised or pseudonymised patient data. New rules also ensure transparency and consent when AI is used by minors under 14.

The law introduces criminal penalties for those who use AI-generated images or videos to cause harm or deception. The Italian approach combines regulation with innovation, seeking to protect citizens while promoting responsible growth in AI development.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot! 

AI-designed proteins surpass nature in genome editing

Researchers in Barcelona have developed synthetic proteins using generative AI that outperform natural ones at editing the human genome. The breakthrough, published in Nature Biotechnology, could transform treatments for cancer and rare genetic diseases.

The team from Integra Therapeutics, UPF and the CRG screened over 31,000 eukaryotic genomes, identifying more than 13,000 previously unknown PiggyBac transposase sequences. Experimental tests revealed ten active variants, two matching or exceeding current lab-optimised versions.

In the next phase, scientists trained a protein large language model on the newly discovered sequences to create entirely new proteins with improved genome-editing precision. The AI-generated enzymes worked efficiently in human T cells and proved compatible with Integra’s FiCAT gene-editing platform.

The Spanish researchers say the approach shows AI can expand biology’s own toolkit. By understanding the molecular ‘grammar’ of proteins, the model produced novel sequences that remain structurally and functionally sound.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot! 

OpenAI backs policy push for Europe’s AI uptake

OpenAI and Allied for Startups have released Hacktivate AI, a set of 20 ideas to speed up AI adoption across Europe ahead of the Commission’s Apply AI Strategy.

The report emerged from a Brussels policy hackathon with 65 participants from EU bodies, governments, enterprises and startups, proposing measures such as an Individual AI Learning Account, an AI Champions Network for SMEs, a European GovAI Hub and relentless harmonisation.

OpenAI highlights strong European demand and uneven workplace uptake, citing sector gaps and the need for targeted support, while pointing to initiatives like OpenAI Academy to widen skills.

Broader policy momentum is building, with the EU preparing an Apply AI Strategy to boost homegrown tools and cut dependencies, reinforcing the push for practical deployment across public services and industry.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot! 

A new AI strategy by the EU to cut reliance on the US and China

The EU is preparing to unveil a new strategy to reduce reliance on American and Chinese technology by accelerating the growth of homegrown AI.

The ‘Apply AI strategy’, set to be presented by the EU tech chief Henna Virkkunen, positions AI as a strategic asset essential for the bloc’s competitiveness, security and resilience.

According to draft documents, the plan will prioritise adopting European-made AI tools across healthcare, defence and manufacturing.

Public administrations are expected to play a central role by integrating open-source EU AI systems, providing a market for local start-ups and reducing dependence on foreign platforms. The Commission has pledged €1bn from existing financing programmes to support the initiative.

Brussels has warned that foreign control of the ‘AI stack’ (the hardware and software that underpin advanced systems) could be ‘weaponised’ by state and non-state actors.

These concerns have intensified following Europe’s continued dependence on American tech infrastructure. Meanwhile, China’s rapid progress in AI has further raised fears that the Union risks losing influence in shaping the technology’s future.

Several high-potential AI firms have already been hosted by the EU, including France’s Mistral and Germany’s Helsing. However, they rely heavily on overseas suppliers for software, hardware, and critical minerals.

The Commission wants to accelerate the deployment of European AI-enabled defence tools, such as command-and-control systems, which remain dependent on NATO and US providers. The strategy also outlines investment in sovereign frontier models for areas like space defence.

President Ursula von der Leyen said the bloc aims to ‘speed up AI adoption across the board’ to ensure it does not miss the transformative wave.

Brussels hopes to carve out a more substantial global role in the next phase of technological competition by reframing AI as an industrial sovereignty and security instrument.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Labour market remains stable despite rapid AI adoption

Surveys show persistent anxiety about AI-driven job losses. Nearly three years after ChatGPT’s launch, labour data indicate that these fears have not materialised. Researchers examined shifts in the US occupational mix since late 2022, comparing them to earlier technological transitions.

Their analysis found that shifts in job composition have been modest, resembling the gradual changes seen during the rise of computers and the internet. The overall pace of occupational change has not accelerated substantially, suggesting that widespread job losses due to AI have not yet occurred.

Industry-level data shows limited impact. High-exposure sectors, such as Information and Professional Services, have seen shifts, but many predate the introduction of ChatGPT. Overall, labour market volatility remains below the levels of historical periods of major change.

To better gauge AI’s impact, the study compared OpenAI’s exposure data with Anthropic’s usage data from Claude. The two show limited correlation, indicating that high exposure does not always imply widespread use, especially outside of software and quantitative roles.

Researchers caution that significant labour effects may take longer to emerge, as seen with past technologies. They argue that transparent, comprehensive usage data from major AI providers will be essential to monitor real impacts over time.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our Diplo chatbot!

Thousands affected by AI-linked data breach in New South Wales

A major data breach has affected the Northern Rivers Resilient Homes Program in New South Wales.

Authorities confirmed that personal information was exposed after a former contractor uploaded data to the AI platform ChatGPT between 12 and 15 March 2025.

The leaked file contained over 12,000 records, with details including names, addresses, contact information and health data. Up to 3,000 individuals may be impacted.

While there is no evidence yet that the information has been accessed by third parties, the NSW Reconstruction Authority (RA) and Cyber Security NSW have launched a forensic investigation.

Officials apologised for the breach and pledged to notify all affected individuals in the coming week. ID Support NSW is offering free advice and resources, while compensation will be provided for any costs linked to replacing compromised identity documents.

The RA has also strengthened its internal policies to prevent unauthorised use of AI platforms. An independent review of the incident is underway to determine how the breach occurred and why notification took several months.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!