AI startups, private capital take aim at consulting's giants

The incumbents are not standing still. KPMG UK's head of advisory, Lisa Fernihough, told the Financial Times bluntly: "I want this organisation -- us -- to still exist. That's how disruptive I believe AI will be. If we don't change, change will happen to us." The firm created an internal initiative called Project Watts to bypass its own approval processes and accelerate AI development, cutting tool-build times from months to weeks.

EY's UK and Ireland consulting head Sayeh Ghanbari acknowledged that parts of the old model would disappear but argued the largest firms would adapt as they had done before, telling the FT that complex, multidisciplinary client problems would continue to favour the major players.

The financial stakes are visible in market data. Accenture, one of the few listed consultancies, has shed more than half its market value since late 2021, falling from over $260 billion to around $108 billion. The Big Four have pulled back on UK graduate recruitment and PwC's global headcount fell by 5,600 last year.

New capital is flowing in on both sides. Europe's largest private equity group has committed more than €500 million to tax advisory firm WTS, which aims to hire 100 partners within five years. OpenAI, meanwhile, has launched its own consulting business backed by $4 billion in private funding, raising concern among established firms that a major technology provider is moving to capture the client relationships they depend on.

Analysts caution that the transition will be gradual. Source Global Research chief executive Fiona Czerniawska says there is currently "very little evidence" of widespread disruption materialising across the sector, with many clients still loyal to long-established names. The firms most immediately at risk, several observers suggest, are mid-tier consultancies — unable to match the capital firepower of the giants or the agility of the new boutiques.

Whether the challengers can hold their ground or are eventually absorbed by the firms they set out to disrupt remains the defining question for an industry in the early stages of profound change.