AI Start-ups Disrupt Consulting with Automation and Efficiency Gains

For many graduates, a role at a major consulting firm represents a career pinnacle. However, a growing number of former consultants are opting to forge their own path, launching AI-powered start-ups aimed at transforming the consulting industry. These ventures are focused on automating traditionally manual tasks, increasing efficiency, and challenging the established business models of the “Big Four” firms – Deloitte, EY, KPMG, and PwC.

From PwC to TheAX: A Shift Towards Outcome-Based Consulting

Ikum Kandola, co-founder of TheAX.ai, exemplifies this trend. After five years at PwC as a cyber consultant and generative AI researcher, Kandola left in 2024 to build a different kind of consultancy. TheAX.ai’s software automates common consulting tasks, such as data collection, analysis, and report generation. Kandola expressed frustration with the internal processes at PwC, particularly the challenges in gaining approval for new AI technologies. “I was really frustrated at PwC with the amount of red tape when we wanted to use a new AI technology,” he stated in a LinkedIn post.

TheAX.ai is pioneering a “Consultancy-as-a-Service” (CaaS) model, enabling firms to shift towards outcome-led consulting. A recent project with Jonny Cooper & Consultants In Business™ involved using the platform to gather data from over 4,000 public sector workers for the Government of Gibraltar, transforming complex responses into an actionable report in a fraction of the time traditional methods would require.

Growing Market for AI in Consulting

The UK’s AI consulting sector is experiencing rapid growth. According to sector analyst Source Global Research, annual spending on AI consulting services increased by 22% from 2023 to £744 million. Forecasts predict a further 33% rise in revenues over the next two years, significantly outpacing the overall UK consulting sector’s projected 11% growth.

This growth is driven by the need for consulting firms to develop into more efficient in the face of lower margins and rising costs, including salary inflation. AI tools can automate repetitive tasks, such as data analysis and market research, significantly reducing project timelines and increasing profitability. Fiona Czerniawska, chief executive of Source Global Research, notes that AI can enable consultancies to complete analyses in days that previously took weeks, directly impacting project profitability.

Grasp: Automating Research for Top-Tier Firms

Grasp, another AI start-up founded by former management consultants, is automating company and market research tasks. Its platform, which leverages AI technology from providers like Anthropic, OpenAI, and Google, serves over 200 clients in management consulting, investment banking, and private equity. Grasp reports that consultants at a Big Four accounting firm saved an estimated 15 hours per week using its “agent AI” subscription service.

Richard Karlsson, Grasp co-founder and chief executive, explains that AI can now produce market analysis, valuation, and due diligence reports “almost instantly,” with human consultants focusing on review, judgment, and client interaction.

Big Four Response and Future Consolidation

The established consulting firms are responding to this disruption through a multi-pronged approach: building their own AI tools, partnering with start-ups and large tech companies, and acquiring smaller AI firms. Bain Capital acquired PiperLab in 2024 as an example of this trend.

PwC UK’s chief technology officer, Umang Paw, stated that the company collaborates with both large and emerging software providers to identify the best AI tools for its consultants, whereas similarly developing its own AI technology.

Experts predict that the consultancy technology market will likely consolidate, with larger firms acquiring innovative start-ups to integrate their platforms into existing consulting processes. Kate Smaje, McKinsey’s global leader for technology and AI, views the emergence of these start-ups as a positive reflection of the strength of their talent development programs.

A New Wave of Entrepreneurship

Despite the potential for acquisition, consultants-turned-start-up founders appear enthusiastic about their independence. Richard Karlsson of Grasp expressed the excitement of being part of the rapidly evolving AI sector, describing it as “indescribable how fun it is.”