How AI is Transforming the Accounting World

After months of providing AI consulting services, David Yue uncovered a critical issue in accounting: a severe shortage of professionals. With 340,000 fewer accountants in the U.S. than five years ago and 75% of CPAs retiring in the next decade, the problem is urgent.

Yue, a Stanford dropout and Y Combinator alum, cofounded Accordance to address this gap. The startup has developed AI software trained on public tax data, including up-to-date regulations and court rulings, to assist tax and accounting professionals. This tool learns from customers' financial histories, helping to reduce costs significantly—for instance, saving one client $50,000 per month.

Notable customers like Figma and Quora have adopted Accordance's technology. Figma used it to handle complex tax issues during its IPO preparations. Yue emphasizes that the software enhances expertise: "You give it to a junior, they become an expert; give it to an expert, they become a champion."

Accordance recently secured $13 million in seed funding from top investors including Khosla Ventures, General Catalyst, and Anthropic, as well as NEA and Sequoia. This funding will support partnerships with universities like the University of San Francisco to integrate AI into accounting education, potentially reaching tens of thousands of students this fall.

Yue believes AI won't replace professionals but will empower them to achieve more with fewer resources. As he puts it, "Empires rise and fall on the back of taxes," highlighting the profound impact of this innovation.

Other AI Developments

• OpenAI faces challenges in restructuring to a for-profit entity, with potential moves out of California and $19 billion in financing at stake.
• Anthropic settled a copyright lawsuit for $1.5 billion, the largest in U.S. history, while a judge ruled its use of legally obtained texts as fair use.
• Scale AI is suing a former employee for alleged corporate espionage, involving stolen trade secrets.
• Recent funding rounds include Sierra raising $350 million at a $10 billion valuation, Basten securing $150 million, Databricks raising $1 billion, and Mistral closing a $1.9 billion round.
• Mercor, a data labeling startup, is capitalizing on opportunities after Meta's acquisition of Scale AI, backed by high-profile investors and growing rapidly.
• Privacy concerns arose as Anthropic's chatbot conversations were exposed online, similar to incidents with other AI models.
• A vulnerability in Expedia's AI travel planner allowed it to provide instructions for making a Molotov cocktail, though it has since been fixed.