Blab AI
AI Drives Shift Away From Consulting, Prompting Firms to Re-engineer Services
Kevin O’Leary, the former Shark Tank investor, opened the Harvard Business School‑produced podcast The Founder's Mindset with a blunt observation: the companies he backs are turning to artificial intelligence for work that once went to consultants. He explained that the shift is driven by cost and speed, noting that “AI is cheaper, as reported by Business Insider.” Even firms that had relied on consultants for specific vertical questions—such as deciding whether to maintain two or three distribution tiers—are now turning first to AI.
O’Leary said the trend has accelerated over the past 24 months. Internal management teams are reviewing AI‑generated recommendations themselves, which reduces the need for external consultants for routine strategy work. “This has only been the last 24 months,” he added.
Consulting firms are responding by embedding AI into their own workflows. Boston Consulting Group (BCG) reports that AI‑ and tech‑focused services now account for more than 40 % of its revenue, with a 25 % year‑over‑year growth in AI services. McKinsey has launched a generative‑AI tool called Lilli, which handles 500,000 requests per month and is used by over 75 % of the firm’s employees.
Accenture has taken a more drastic approach. CEO Julie Sweet said the company laid off 12,000 people in three months because they could not “retrain for AI.” The layoffs were part of a broader restructuring aimed at building an AI‑ready workforce.
Despite these changes, O’Leary maintains that consulting still has a place for early‑career professionals. He said, “One of the things that you could argue is good about consulting is, if you spend less than two years there, and you're going to search all 11 sectors of the economy to find out where you fit, that makes sense to me.” He cautioned that longer tenures can lead to stagnation: “When I see a résumé where someone wants to be a CEO of one of my companies, and has been at a consulting firm for seven years, I just tear that up.”
The broader industry context shows a rapid adoption of generative AI across enterprises. Companies are using AI to answer targeted business questions, automate routine research, and develop new pricing models such as outcome‑based contracts. The shift is reshaping the consulting value proposition: firms are now positioning themselves as AI service providers rather than traditional strategy consultants.
O’Leary is also involved in building a hyperscale AI data center in Utah, a project that illustrates the growing demand for AI compute infrastructure. The data center initiative reflects the broader trend of enterprises investing in on‑premise or regional AI capabilities to support internal AI workloads.
The transition to AI‑driven consulting has implications for talent. Accenture’s layoffs and the need for retraining highlight a skills gap in AI‑related roles. Firms that can quickly upskill or hire AI talent will be better positioned to capture the growing market for AI services.
In summary, the past two years have seen a measurable shift from traditional consulting to AI‑based solutions. Companies backed by Kevin O’Leary are leading the way, using AI to answer specific business questions at lower cost. Consulting giants are adapting by embedding AI into their own operations and expanding their AI service lines. The industry is still evolving, and the long‑term impact on consulting careers and firm structures remains to be seen.
O’Leary said the trend has accelerated over the past 24 months. Internal management teams are reviewing AI‑generated recommendations themselves, which reduces the need for external consultants for routine strategy work. “This has only been the last 24 months,” he added.
Consulting firms are responding by embedding AI into their own workflows. Boston Consulting Group (BCG) reports that AI‑ and tech‑focused services now account for more than 40 % of its revenue, with a 25 % year‑over‑year growth in AI services. McKinsey has launched a generative‑AI tool called Lilli, which handles 500,000 requests per month and is used by over 75 % of the firm’s employees.
Accenture has taken a more drastic approach. CEO Julie Sweet said the company laid off 12,000 people in three months because they could not “retrain for AI.” The layoffs were part of a broader restructuring aimed at building an AI‑ready workforce.
Despite these changes, O’Leary maintains that consulting still has a place for early‑career professionals. He said, “One of the things that you could argue is good about consulting is, if you spend less than two years there, and you're going to search all 11 sectors of the economy to find out where you fit, that makes sense to me.” He cautioned that longer tenures can lead to stagnation: “When I see a résumé where someone wants to be a CEO of one of my companies, and has been at a consulting firm for seven years, I just tear that up.”
The broader industry context shows a rapid adoption of generative AI across enterprises. Companies are using AI to answer targeted business questions, automate routine research, and develop new pricing models such as outcome‑based contracts. The shift is reshaping the consulting value proposition: firms are now positioning themselves as AI service providers rather than traditional strategy consultants.
O’Leary is also involved in building a hyperscale AI data center in Utah, a project that illustrates the growing demand for AI compute infrastructure. The data center initiative reflects the broader trend of enterprises investing in on‑premise or regional AI capabilities to support internal AI workloads.
The transition to AI‑driven consulting has implications for talent. Accenture’s layoffs and the need for retraining highlight a skills gap in AI‑related roles. Firms that can quickly upskill or hire AI talent will be better positioned to capture the growing market for AI services.
In summary, the past two years have seen a measurable shift from traditional consulting to AI‑based solutions. Companies backed by Kevin O’Leary are leading the way, using AI to answer specific business questions at lower cost. Consulting giants are adapting by embedding AI into their own operations and expanding their AI service lines. The industry is still evolving, and the long‑term impact on consulting careers and firm structures remains to be seen.
