Business

Why we should all pay attention to how lawyers, auditors, and accountants are using AI

Published

6 months ago

July 1, 2025

Hello and welcome to Eye on AI. In today’s edition…the U.S. Senate rejects moratorium on state-level AI laws…Meta unveils its new AI organization…Microsoft says AI can out diagnose doctors…and Anthropic shows why you shouldn’t let an AI agent run your business just yet.

AI is rapidly changing work for many of those in professional services—lawyers, accountants, auditors, compliance officers, consultants, and tax advisors. In many ways, the experience of these professionals, and the businesses they work for, are a harbinger of what’s likely to happen for other kinds of knowledge workers in the near future.

Because of this, it was interesting to hear the discussion yesterday at a conference on the “Future of Professionals” at Oxford University’s Said School of Business. The conference was sponsored by Thomson Reuters, in part to coincide with the publication of a report it commissioned on trends in professionals’ use of AI.

That report, based on a global survey of 2,275 professionals in February and March, found that professional services firms seem to be finding a return on their AI investment at a higher rate than in other sectors. Slightly more than half—53%—of the respondents said their firm had found at least one AI use case that was earning a return, which is about twice what other, broader surveys have tended to find.

Not surprisingly, Thomson Reuters found it was the professional firms where AI usage was part of a well-defined strategy and that had implemented governance structures around AI implementation that were most likely to see gains from the technology. Interestingly, among firms where AI adoption was less structured, 64% of those surveyed still reported ROI from at least one use case, which may reflect how powerful and time-saving these tools can be even when used by individuals to improve their own workflows.

The biggest factors holding back AI use cases, the respondents said, included concerns about inaccuracy (with 50% of those surveyed noting this was a problem) and data security (42%). For more on how law firms are using AI, check out this feature from my Fortune colleague Jeff John Roberts.

Mind the gaps

Here are a few tidbits from the conference worth highlighting:

Mari Sako, the Oxford professor of management studies who helped organize the conference, talked about the three gaps that professionals needed to watch out for in trying to manage AI implementation: One was the responsibility gap between model developers, application builders, and end users of AI models. Who bears responsibility for the model’s accuracy and possible harms?

A second was the principles to practice gap. Businesses enact high-minded “Responsible AI” principles but then the teams building or deploying AI products struggle to operationalize them. One reason this happens is that first gap—it means that teams building AI applications may not have visibility into the data used to train a model they are deploying or detailed information about how it may perform. This can make it hard to apply AI principles about transparency and mitigating bias, among other things.

Finally, she said, there is a goals gap. Is everyone in the business aligned about why AI is being used in the first place? Is it for human augmentation or automation? Is it operational efficiency or revenue growth? Is the goal to be more accurate than a human, or simply to come close to human performance at a lower cost? What role should environmental sustainability play in these decisions? All good questions.

Not a substitute for human judgment

Ian Freeman, a partner at KPMG UK, talked about his firm’s increasing use of AI tools to help auditors. In the past, auditors were forced to rely on sampling transactions, trying to apply more scrutiny to those that presented a bigger business risk. But now, with AI, it is possible to run a screen on every single transaction. But still, it is the riskiest transactions that should get the most scrutiny and AI can help identify those. Freeman said AI could also help more junior auditors understand the rationale for probing certain transactions. And he said AI models could help with a lot of routine financial analysis.

But he said KPMG had a policy of not deploying AI in situations that called for human judgment. Auditing is full of such cases, such as deciding on materiality thresholds, making a call about whether a client has submitted enough evidence to justify a particular accounting treatment, or deciding on appropriate warranty reserves for a new product. That sounds good, but I also wonder about the ability of AI models to act as tutors or digital mentors to junior auditors, helping them to develop their professional judgment? Surely, that seems like it might be a good use case for AI too.

A senior partner from a large law firm (parts of the conference were conducted under Chatham House Rules, so I can’t name them) noted that many corporate legal departments are embracing AI faster than legal firms—something the Thomson Reuters survey also showed—and that this disparity was putting pressure on the firms. Corporate counsel are demanding that external lawyers be more transparent about their AI usage—and critically, putting pressure on legal bills on the theory that many legal tasks can now be done in far fewer billable hours.

Changing career paths and the need for AI expertise

AI is also possibly going to change how professional service firms think about career paths within their business and even who leads these firms, several lawyers at the conference said. AI expertise is increasingly important to how these firms operate, and yet it is difficult to attract the talent these businesses need if these “non-qualified” technical experts (the term “non-qualified” is simply used to denote an employee who has not been admitted to the bar, but its pejorative connotations are hard to escape) know they will always be treated as second-class compared to the client-facing lawyers and also are ineligible for promotion to the highest ranks of the firm’s management.

Michael Buenger, executive vice president and chief operating officer at the National Center for State Courts in the U.S., said that if large law firms had trouble attracting and retaining AI expertise, the situation was far worse for governments. And he pointed out that judges and juries were increasingly being asked to rule on evidence, particularly video evidence, but also other kinds of documentary evidence, that might be AI manipulated, but without access to independent expertise to help them make calls about what has been altered by AI and how. If not addressed, he said, this could seriously undermine faith in the courts to deliver justice.

There were lots more insights from the conference, but that’s all we have space for today. Here’s more AI news.

Note: The essay above was written and edited by humans. The news items below are curated by the newsletter author. Short summaries of the relevant stories were created using AI. These summaries were then edited and fact-checked by the author, who also wrote the blurb headlines. This entire newsletter was then further edited by additional humans.

Jeremy Kahn
jeremy.kahn@fortune.com
@jeremyakahn

Want to know more about how to use AI to transform your business? Interested in what AI will mean for the fate of companies, and countries? Then join me at the Ritz-Carlton, Millenia in Singapore on July 22 and 23 for Fortune Brainstorm AI Singapore. This year’s theme is The Age of Intelligence. We will be joined by leading executives from DBS Bank, Walmart, OpenAI, Arm, Qualcomm, Standard Chartered, Temasek, and our founding partner Accenture, plus many others, along with key government ministers from Singapore and the region, top academics, investors and analysts. We will dive deep into the latest on AI agents, examine the data center build out in Asia, examine how to create AI systems that produce business value, and talk about how to ensure AI is deployed responsibly and safely. You can apply to attend here and, as loyal Eye on AI readers, I’m able to offer complimentary tickets to the event. Just use the discount code BAI100JeremyK when you checkout.

AI IN THE NEWS

Senate strips 10-year moratorium on state AI laws from Trump tax bill. The U.S. Senate voted 99-1 to remove the controversial measure from President Donald Trump’s landmark “Big Beautiful Bill.” The restrictions had been supported by Silicon Valley tech companies and venture capitalists as well as their allies in the Trump administration. Bipartisan opposition to the moratorium—led by Sen. Marsha Blackburn—centered on preserving state-level protections like Tennessee’s Elvis Act, which protects citizens from unauthorized use of their voice or likeness, including in AI-generated content. Critics warned that in the absence of federal AI regulation, the ban on state-level laws would leave U.S. citizens with no protection from AI harms at all. But tech companies argue that the increasing patchwork of state-level AI regulation is unworkable, hampering AI progress. Read more from Bloomberg News here.

Meta announced new AI leadership team and key hires from rival AI labs. Meta CEO Mark Zuckerberg sent a memo to employees formally announcing the creation of Meta Superintelligence Labs, a new organization uniting the company’s foundational AI model, product, and Fundamental AI Research (FAIR) teams under a single umbrella. Scale AI founder and CEO Alexandr Wang—who is joining Meta as part of a $14.3 billion investment into Scale—will have the title “chief AI officer” and will co-lead the new Superintelligence unit along with former GitHub CEO Nat Friedman. Zuckerberg also announced the hiring of 11 prominent AI researchers from OpenAI, Google DeepMind, and Anthropic. You can read more about Meta’s AI talent raid from Wired here.

Cloudflare begins blocking AI web-crawlers by default. Internet content delivery provider Cloudflare announced it has begun blocking AI companies’ web crawlers from accessing website content by default. Owners of the websites can choose to unblock specific crawlers—such as those Google uses to build its search index—or even opt for a “pay per crawl” option that will allow them to monetize the scraping of their content. With around 16% of global internet traffic passing through Cloudflare, the change could significantly impact AI development. (Full disclosure: Fortune is one of the initial participants in the Cloudflare crawler initiative.) Read more from CNBC here.

EYE ON AI RESEARCH

Even better than House? Microsoft has unveiled an AI system for medical diagnoses that it claims can accurately diagnose complex cases four times more accurately than individual human doctors (under certain conditions—more on that in a sec.) The “Microsoft AI Diagnostic Orchestrator” (MAI-DxO—gotta love those AI acronyms) consists of five AI “agents” that each have a distinct role to play in scouring the medical literature, hypothesizing what the patient’s condition might be, ordering tests to eliminate possibilities, and even trying to optimize these tests to derive the most useful information at the least cost. These five “AI doctors” then engage in a process Microsoft is dubbing “chain of debate,” where they collaborate and critique one another, ultimately arriving at a diagnosis.

In trials involving 304 real-world cases from the New England Journal of Medicine, MAI-DxO, achieved an 85.5% success rate, compared to about 20% for human doctors. Microsoft tried powering the system with different AI models from OpenAI, Google, Meta, Anthropic, and DeepSeek, but found it worked best when using OpenAI’s o3 model (Microsoft is a major investor in OpenAI, sells OpenAI’s models through its cloud service, and depends on OpenAI for many of its own AI offerings). As for the poor performance of the human docs, it is important to note that in the test they were not allowed to consult either medical textbooks or colleagues.

Nonetheless, Microsoft AI CEO Mustafa Suleyman said the system could transform healthcare—although the company also said MAI-DxO is just a research project and is not yet being turned into a product. You can read more from the Financial Times here.

FORTUNE ON AI

Mark Zuckerberg overhauled Meta’s entire AI org in a risky, multi-billion dollar bet on ‘superintelligence’ —by Sharon Goldman

Longtime Bessemer investor Mary D’Onofrio, who backed Anthropic and Canva, leaves for Crosslink Capital —by Allie Garfinkle

Ford CEO says new technologies like AI are leaving many workers behind, and companies need a plan —by Jessica Mathews

Commentary: When your AI assistant writes your performance review: A glimpse into the future of work —by David Ferrucci

AI CALENDAR

July 8-11: AI for Good Global Summit, Geneva

July 13-19: International Conference on Machine Learning (ICML), Vancouver

July 22-23: Fortune Brainstorm AI Singapore. Apply to attend here.

July 26-28: World Artificial Intelligence Conference (WAIC), Shanghai.

Sept. 8-10: Fortune Brainstorm Tech, Park City, Utah. Apply to attend here.

Oct. 6-10: World AI Week, Amsterdam

Dec. 2-7: NeurIPS, San Diego

Dec. 8-9: Fortune Brainstorm AI San Francisco. Apply to attend here.

BRAIN FOOD

AI tries to run a vending machine business. Hilarity ensues, Part Deux. A month ago in the research section of this newsletter, I wrote about research from Andon Labs about what happens when you try to have various AI models run a simulated vending machine business. Now, Anthropic teamed up with Andon Labs to test one of its latest models, Claude 3.7 Sonnet, to see how it did running a real-life vending machine in Anthropic’s San Francisco office. The answer, as it turns out, is not well at all. As Anthropic writes in its blog on the experiment, “If Anthropic were deciding today to expand into the in-office vending market, we would not hire [Claude 3.7 Sonnet].”

The model made a lot of mistakes—like telling customers to send it payment to Venmo account that didn’t exist (it had hallucinated it)—and also a lot of poor business decisions, like offering far too many discounts (including an Anthropic employee discount in a location where 99% of the customers were Anthropic employees), failing to seize a good arbitrage opportunity, and failing to increase prices in response to high demand.

The entire Anthropic blog makes for fun reading. And the experiment makes it clear that AI agents probably are nowhere near ready for a lot of complex, multi-step tasks over long time periods.

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Business

Nicotine pouches can be a better alternative to cigarettes says CEO

Published

48 minutes ago

December 14, 2025

Jace Porter

Smoking is one of the clearest public-health failures of our time. More than 500,000 Americans still die each year from smoking-related illnesses, and globally the picture is even more alarming. In the United States, anti-smoking campaigns have reduced the number of new cigarette users, but the effectiveness of these measures may be fading. Indeed, the headline of a widely-shared news story notes “Celebrities Are Making Smoking Cigarettes Cool Again”. Yikes. Meanwhile, a quick trip to Mexico, Europe, or Asia is enough to see that cigarettes remain very much in style.

Reducing cigarette use, and preventing a new generation from getting hooked on nicotine, is a noble goal. That is one reason James Monsees and Adam Bowen founded the vape company JUUL Labs, as a potentially less harmful alternative for adult smokers. But a mix of regulatory missteps by a hostile FDA and market loopholes opened the door to a wave of counterfeit and bootleg vapes, often imported from China, sold in local stores, highly addictive, and completely unregulated. Many people became sick from using vapes with unknown ingredients. Teenagers were easily able to access bootleg vapes from China in youth-friendly flavors. What began as an idealistic goal—moving adult smokers off of cigarettes—turned into a new epidemic.

Now we have two problems: cigarettes and vapes.

I believe science and technology can solve both. I was a tobacco user who became addicted to vaping. I tried everything to quit and cut down my nicotine use. Eventually, I discovered Swedish-style white pouches. That experience led me to create Sesh+, a premium, tobacco-free nicotine pouch made with transparent ingredients. It has been life-changing for me personally: I haven’t picked up a vape since switching to pouches. In Sweden, where oral nicotine products have been widely used for decades, smoking rates are among the lowest in Europe and smoking-related disease is correspondingly lower.

There is growing evidence that nicotine itself, while addictive, is not what primarily causes smoking-related disease; it’s the toxic byproducts of combustion that kill. With vaping, the concern is different: it’s the lack of transparency and quality standards that should alarm us. As a health-conscious consumer, I want to know exactly what I’m putting into my body. That’s why our pouches are independently lab-tested for contaminants like heavy metals and are manufactured in the United States under strict quality controls.

Fake nicotine pouches are already in the U.S. market. Sofia Hamilton writes for Reason that her favorite convenience store unknowingly sells counterfeit nicotine pouches, and how only someone deeply familiar with FDA nicotine rules could tell the difference. No one should have to be a nicotine policy expert just to know whether a product is safe.

Important questions remain. We do not want to create a product that attracts people who don’t already use nicotine. The average Sesh+ customer is over 35, and I’m very proud of that. Early data is encouraging: a recent Rutgers study found that new nicotine users taking up pouches remains very low. Government has a responsibility to keep black-market and counterfeit pouches out of consumers’ hands. Industry must ensure retailers are educated and know what they’re selling. And we need strong youth prevention laws.

Nicotine pouches will only be effective if industry and government work together to ensure we are not attracting youth or non-nicotine users.

In the U.K., the proposed Tobacco and Vapes Bill would ban people born in or after 2009 from ever purchasing nicotine products. In the United States, we have already raised the legal age to buy tobacco to 21. These are the kinds of measures our industry should support. If the legislation in the U.K. passes, I hope other countries will adopt similar policies to prevent youth from accessing nicotine products. I also hope to see product-verification technology adopted as an industry standard so counterfeit nicotine products never reach consumers. Age verification is not enough; we must ensure a market for counterfeit and bootleg nicotine pouches does not emerge.

If companies in the nicotine pouch space work together, we can learn from JUUL’s experience and avoid repeating the same mistakes. Our responsibility is clear: help adult smokers move to potentially less harmful alternatives, without creating a new generation of nicotine users. If we get this right, a world free from tobacco is not just aspirational. It’s achievable.

Max Cunningham is the CEO of Sesh+, a nicotine pouch company based in Austin, Texas and backed by 8VC. The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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Business

Kevin Hassett says Trump’s opinion would have ‘no weight’ on the FOMC

Published

1 hour ago

December 14, 2025

Jace Porter

National Economic Council Director Kevin Hassett, one of the top contenders to replace Jerome Powell as Federal Reserve chair, downplayed any role that President Donald Trump’s opinion would have in setting interest rates.

That’s despite Trump repeatedly insisting that he ought to have some say on monetary policy. Most recently, he said Friday his voice should be heard because “I’ve made a lot of money.”

In an interview Sunday on CBS’ Face the Nation, Hassett said Trump has “very strong and well founded views” but pointed out that the Fed is independent, with the chairman tasked with driving consensus among other policymakers on the rate-setting Federal Open Market Committee.

“But in the end, it’s a committee that votes,” he added. “And I’d be happy to talk to the president every day until both of us are dead because it’s so much fun to talk, even if I were Fed chair of if I wasn’t Fed chair.”

Hassett said he hopes Kevin Warsh, a former Fed governor who is also being considered for the chairmanship, would talk to the president as well if he becomes Fed chief.

Trump told the Wall Street Journal on Friday that Warsh was at the top of his list and said “the two Kevins are great.”

The comment surprised Wall Street, which had overwhelming odds on Hassett as the favorite. On the prediction market Kalshi, the probability that he will be nominated as Fed chair has plunged to 50% from 80.6% earlier this month, while Warsh’s odds shot up to 41% from 11%.

Trump has said he will nominate a Fed chair in early 2026, with Powell’s term due to expire in May. Until then, the contenders have time to make their case. According to the Journal, Trump met Warsh on Wednesday at the White House and pressed him on whether he could be trusted to back rate cuts.

When asked on Sunday if Trump’s voice would have equal weighting to the voting members on the FOMC, Hassett replied, “no, he would have no weight.”

“His opinion matters if it’s good, if it’s based on data,” he explained. “And then if you go to the committee and you say, ‘well the president made this argument, and that’s a really sound argument, I think. What do you think?’ If they reject it, then they’ll vote in a different way.”

For his part, Hassett has regularly supported more easing and is one of Trump’s fiercest economic surrogates. But since joining Trump’s second administration, some of Hassett’s previous colleagues have expressed alarm over signs he’s serving more as a political loyalist.

He has become a regular presence on cable news, defending Trump’s policy priorities, downplaying unfavorable data, and echoing the White House line on everything from inflation to the legitimacy of federal statistics.

Meanwhile, the Fed’s early reappointment of its regional bank presidents eased concerns the central bank would soon lose its independence as Trump continues demanding steeper rate cuts.

That’s after the administration floated a district residency requirement for Fed presidents—an idea Hassett backed—raising fears it was seeking a wider leadership shake-up.

“If I’m reading this properly, they just Trump-proofed the Fed,” Justin Wolfers, a professor of public policy and economics at the University of Michigan, wrote in a post on X about the reappointment announcement.

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Business

Police have person of interest in custody over Brown Univ. shooting that killed 2, wounded 9

Published

2 hours ago

December 14, 2025

Jace Porter

Police in Rhode Island said early Sunday that they had a person of interest in custody after a shooting that rocked the Brown University campus during final exams, leaving two people dead and nine others wounded.

Col. Oscar Perez, chief of the Providence police, confirmed at a news conference that the detained person was in their 30s and that authorities are not currently searching for anyone else. He declined to say whether the person was connected to the university.

Separately, an FBI agent said that the arrest occurred at a Hampton Inn hotel in Coventry, about 20 miles (32 kilometers) from Providence. Officers remained on the scene there, with police tape blocking off a hallway.

The shooting erupted Saturday afternoon in the engineering building of the Ivy League school in Providence, Rhode Island, during final exams. Hundreds of police officers had scoured the Brown University campus along with nearby neighborhoods and pored over video in pursuit of a shooter who opened fire in a classroom.

Armed with a handgun, the shooter fired more than 40 9mm rounds, according to a law enforcement official. Authorities as of Sunday morning hadn’t recovered a gun but did recover two loaded 30-round magazines, said the official, who spoke on the condition of anonymity because they were not authorized to publicly discuss the investigation.

University officials on Sunday canceled all classes, exams, papers and projects for the remainder of the fall semester and said students were free to leave. Those who remain on campus will have access to services and support, Provost Francis Doyle said in a statement.

“At this time, it is essential that we focus our efforts on providing care and support to the members of our community as we grapple with the sorrow, fear and anxiety that is impacting all of us right now,” Doyle wrote.

Providence leaders warned that residents will notice a heavier police presence on Sunday. Many local businesses announced they would remain closed and expressed shock and heartbreak as the community continued to process the news of the shooting.

“Everybody’s reeling, and we have a lot of recovery ahead of us,” Brown University President Christina Paxson said at the news conference. “Our community’s strong and we’ll get through it, but it’s devastating.”

Surveillance video released by police showed a suspect, dressed in black, calmly walking away from the scene.

Earlier, Paxson said she was told 10 people who were shot were students. Another person was injured by fragments from the shooting but it was not clear if the victim was a student, she said.

The search for the shooter paralyzed the campus, the nearby neighborhoods filled with stately brick homes and the downtown in Rhode Island’s capital city until a shelter-in-place order was lifted early Sunday. Streets normally bustling with activity on weekends were eerily quiet. Officers in tactical gear led students out of some campus buildings and into a fitness center where they waited. Others arrived at the shelter on buses without jackets or any belongings.

Mayor advised people to stay home

Investigators were not immediately sure how the shooter got inside the first-floor classroom. Outer doors of the building were unlocked but rooms being used for final exams required badge access, Providence Mayor Brett Smiley said.

Smiley was emotional as he discussed the city’s efforts to prepare for a mass shooting.

“We all, intellectually, knew it could happen anywhere, including here, but that’s not the same as it happening in our community, and so this is an incredibly upsetting and emotional time for Providence, for Brown, for all of us,” he said. “It’s not something that we should have to train for, but we have.”

Nine people with gunshot wounds were taken to Rhode Island Hospital, where one was in critical condition. Six required intensive care but were not getting worse and two were stable, hospital spokesperson Kelly Brennan said.

Exams were underway during shooting

Engineering design exams were underway when the shooting occurred in the Barus & Holley building, a seven-story complex that houses the School of Engineering and physics department. The building includes more than 100 laboratories, dozens of classrooms and offices, according to the university’s website.

Emma Ferraro, a chemical engineering student, was in the building’s lobby working on a final project when she heard loud pops coming from the east side. Once she realized they were gunshots, she darted for the door and ran to a nearby building where she sheltered for several hours.

Former ‘Survivor’ contestant just left the building

Eva Erickson, a doctoral candidate who was the runner-up earlier this year on the CBS reality competition show “Survivor,” said she left her lab in the engineering building 15 minutes before shots rang out.

The engineering and thermal science student shared candid moments on “Survivor” as the show’s first openly autistic contestant. She was locked down in the campus gym following the shooting and shared on social media that the only other member of her lab who was present was safely evacuated.

Brown senior biochemistry student Alex Bruce was working on a final research project in his dorm directly across the street from the building when he heard sirens outside.

“I’m just in here shaking,” he said, watching through the window as armed officers surrounded his dorm.

Students hid under desks

Students in a nearby lab turned off the lights and hid under desks after receiving an alert about the shooting, said Chiangheng Chien, a doctoral student in engineering who was about a block away from the scene.

Mari Camara, 20, a junior from New York City, was coming out of the library and rushed inside a taqueria to seek shelter. She spent more than three hours there, texting friends while police searched the campus.

“Everyone is the same as me, shocked and terrified that something like this happened,” she said.

Brown, the seventh oldest higher education institution in the U.S., is one of the nation’s most prestigious colleges with roughly 7,300 undergraduates and more than 3,000 graduate students. Tuition, housing and other fees run to nearly $100,000 per year, according to the university.

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