UpTrajectory Review
Kevin O'Leary, a prominent investor from 'Shark Tank,' argues that AI is rapidly replacing traditional consultants in business strategy. He notes that companies he invests in are increasingly turning to AI solutions for tasks that were once outsourced to consulting firms, highlighting a significant shift in the industry over the past two years.
This trend is crucial for small business owners to monitor, as it signals a potential cost-saving opportunity. By leveraging AI, businesses can streamline decision-making processes and reduce reliance on expensive consulting services. However, while AI can provide valuable insights, operators should remain cautious about over-relying on technology without human oversight. The balance between AI efficiency and human expertise will be key in navigating this evolving landscape.
“Even the companies that I invest in that used to use a lot of consultants for very specific vertical situations… are first going to AI, which they can do for a lot cheaper.” — Business Insider
Takeaway: Consider integrating AI tools into your business strategy to reduce costs and improve efficiency.
From the original item — Business Insider:
Michael Tran/AFP via Getty Images
- ‘Shark Tank’ investor Kevin O’Leary believes AI can do the work of consultants.
- He said that companies he backs are already using AI instead of going to consulting firms.
- The shift “has only been the last 24 months,” he said.
Kevin O’Leary thinks that consultants’ days are numbered.
The “Shark Tank” investor, who is these days preoccupied with opening a hyperscale AI data center in Utah, said companies he backs are already turning to AI for work they might once have outsourced to consulting firms.
“Even the companies that I invest in that used to use a lot of consultants for very specific vertical situations, like changing retail distribution, or should they keep two tiers of distribution versus three, are first going to AI, which they can do for a lot cheaper,” O’Leary said on a recent episode of “The Founder’s Mindset Podcast.”
These companies, he said, are asking their internal management teams to test those ideas, bypassing the need for traditional consultants altogether.
“This has only been the last 24 months,” he said, noting how quickly he’s seeing the shift unfold.
Over the past few years, consulting firms have raced to reinvent themselves as AI rapidly advances — developing their own internal tools and piloting them to clients, hiring armies of forward-deployed engineers, and cozying up to AI startups across Silicon Valley.
While AI poses a threat to consulting, many of the largest firms also see considerable opportunity in it.
McKinsey says about 40% of its work now comes from AI-related projects. BCG said 20% of its work was AI-related in 2024. Last year, Accenture — which reported earnings this week — consolidated its strategy, consulting, song, technology, and operations services into a single unit organized around AI called “reinvention services.”
These firms are billing clients to help them deploy the technology coming out of Silicon Valley, and are adopting it themselves.
Even if consulting firms survive the AI revolution, though, O’Leary said consulting is a career path that has always had a ceiling. A short stint in the industry has value, he said, especially for young professionals trying to find their footing in the labor market. Anything longer, though, he said, is a red flag.
“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 said.
In the long term, however, it can lead to stagnation — or worse, a career of “mediocrity.”
“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,” he said.
Google CEO Sundar Pichai might disagree, however. He got his start at McKinsey. So did former Meta COO Sheryl Sandberg.