Kevin O’Leary believes the days of consultants are numbered.
The “Shark Tank” investor, who recently became obsessed with opening a hyperscale AI data center in Utah, said the companies he backs are already relying on AI to do tasks that would once have been outsourced to consulting firms.
“Even the companies that I invest in that used to hire a lot of consultants for very specific vertical situations, like changing retail distribution or should we keep distribution from three tiers to two tiers, are starting to move toward AI first, which allows us to do it much more cheaply,” O’Leary said on a recent episode of “The Founder’s Mindset Podcast.”
He says these companies are asking in-house management teams to test their ideas, bypassing the need for traditional consultants altogether.
“This has been over the last 24 months,” he said, noting how rapidly change has occurred.
In recent years, consulting firms have been busy reinventing themselves to keep pace with rapid advances in AI, developing and deploying their own in-house tools to clients, hiring large numbers of forward-deployed engineers, and deepening ties with AI startups across Silicon Valley.
While AI poses a threat to consulting, many leading companies also see great opportunity in AI.
According to McKinsey, about 40% of its business now comes from AI-related projects. BCG said that by 2024, 20% of its business will be AI-related. Last year, Accenture, which reported results this week, merged its strategy, consulting, music, technology and operations services into a single division organized around AI called Reinvention Services.
These companies charge customers to help them adopt Silicon Valley-originated technologies, which they also adopt at their own companies.
But even if consulting firms survive the AI revolution, O’Leary said consulting will always be a career path with a ceiling. He said short-term stints in the industry can be valuable, especially for young professionals looking to find their footing in the labor market. But anything longer than that is a red flag, he says.
“One of the things that you can argue is good about consulting is that you’re there for less than two years and you’re looking at all 11 sectors of the economy to find out where you fit, and that makes sense to me,” he said.
However, in the long run, it can lead to stagnation or even worse, a “mediocre” career.
“When I see a resume that says I want to be the CEO of my company and have worked at a consulting firm for seven years, I tear it up,” he says.
However, Google CEO Sundar Pichai may disagree. He started his career at McKinsey. So did former Meta COO Sheryl Sandberg.