Shark Tank investor says firms now turn to AI before hiring consultants
Shark Tank investor Kevin O'Leary says companies he backs turn to AI for work that was once outsourced to consultants.
Shark Tank investor Kevin O'Leary via Shutterstock
- Companies backed by Kevin O’Leary are increasingly using AI before hiring consultants because it is faster and cheaper for targeted business questions.
- Internal teams now review AI-generated recommendations themselves, reducing the need to pay outside consultants for routine strategy work.
- Consulting firms are adapting by using AI for research, building AI services, and testing new pricing models to stay relevant.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
Shark Tank investor Kevin O'Leary says companies he backs turn to AI for work that was once outsourced to consultants.
Speaking on The Founder's Mindset Podcast produced by Harvard Business School's Foundry, O'Leary said that AI is now a preferred choice for companies over consultants – because AI is cheaper, as reported by Business Insider.
"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.
He said internal management teams evaluate AI-generated recommendations, reducing the need for external consultants.
O'Leary noted that the shift is unfolding quickly: "This has only been the last 24 months.”
Consulting firms are trying to reposition their offerings to keep pace with the AI revolution by adopting AI tools to handle routine research and experimenting with new business models, like shifting to outcome-based pricing.
This allows major consulting companies to look at AI as an opportunity rather than an existential threat. For instance, Boston Consulting Group (BCG) said AI- and tech-focused services now account for more than 40% of its revenue, driven by 25% year-over-year growth in AI services.
Another consulting group, McKinsey, launched its generative AI tool Lilly, which handles 500,000 requests per month and is used by over 75% of the company’s employees.
Accenture laid off 12,000 people in three months for being unable to “retrain for AI”: “We’re parting ways, in a very short timeframe, with people we believe won’t be able to acquire the skills we need,” CEO Julie Sweet said.
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But regardless of the efforts made by consulting firms to find their place amid the AI boom, O'Leary believes that consulting makes sense for a starting career – but cannot be a long-term plan.
"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.
Anything longer, according to him, 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," O'Leary said.
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