How AI Is Changing Consulting—But Not Replacing McKinsey Yet
Artificial intelligence is already reshaping the way consulting, legal, and accounting firms operate—but is it ready to fully replace industry giants like McKinsey? While many startups and VCs believe in the inevitable AI disruption in consulting, real transformation is unfolding gradually. The $5 trillion professional services industry is ripe for AI-first solutions that promise software-like margins. But trust, relationships, and complex problem-solving still anchor traditional firms. So how soon will AI overtake the big players? The answer is more nuanced than you might think.
At a recent StrictlyVC event in Menlo Park, Navin Chaddha, managing director at Mayfield Fund, explained why he’s bullish on AI’s role in disrupting labor-intensive sectors like consulting. Drawing from decades of tech evolution—from mainframes to mobile to the cloud—Chaddha sees AI as the next seismic shift. Yet he cautions that startups shouldn’t go head-to-head with legacy giants just yet. Instead, they should target underserved, niche markets where trust is easier to build and disruption is more likely to succeed.
The Case for AI Disruption in Consulting
AI disruption in consulting isn't just a hypothetical pitch deck narrative—it’s already beginning. Many routine, repetitive tasks traditionally handled by armies of junior consultants or associates are now being automated. Think research synthesis, market analysis, due diligence, financial modeling, and even basic strategy formulation. These are tasks that large language models (LLMs) and generative AI tools can complete in minutes.
What makes this wave different from past tech shifts is AI's ability to not only process information faster but to generate insights, detect anomalies, and even propose creative solutions. This creates an opportunity for AI-first startups to offer boutique consulting services at a fraction of the cost—and often at higher speed. Instead of charging hundreds of dollars per hour, these new players can offer subscriptions, usage-based billing, or freemium models with low marginal cost.
Chaddha believes that AI can bring software-like scalability to services traditionally limited by headcount. This scalability is particularly compelling in a market so large and so deeply reliant on human capital. However, to unlock its full potential, startups must build products that integrate deeply into decision-making workflows—not just tools that generate PowerPoint slides.
Why McKinsey Still Has an Edge—For Now
Despite AI’s potential, firms like McKinsey, BCG, and Deloitte aren’t panicking just yet. Their strengths lie not in producing faster outputs, but in delivering trust-based insights to executives making high-stakes decisions. Relationships built over decades, global networks, and the ability to navigate highly sensitive business environments are not easily replaced by a chatbot or a prompt-engineered report.
Moreover, clients of these firms often pay not just for answers, but for confidence. A CEO might ask McKinsey to validate a strategic pivot, knowing that the firm's brand and institutional experience reduce perceived risk. AI, no matter how powerful, still lacks the nuance, empathy, and accountability that human consultants bring to boardroom-level conversations.
Still, these firms aren’t standing still. Many are actively investing in proprietary AI tools, partnering with tech companies, and training their teams to blend human insight with machine-generated analysis. In effect, they're trying to become AI-powered themselves before being fully disrupted. But there's a generational shift brewing—one that could tip the scales as younger decision-makers grow more comfortable with AI-driven advice.
The Smart Strategy for AI Startups Entering Consulting
Rather than trying to dethrone McKinsey overnight, AI startups are better off focusing on specific, underserved markets. Think midsized businesses, emerging markets, or industry-specific niches like supply chain optimization, ESG compliance, or procurement. These areas are less reliant on legacy trust structures and more open to innovative pricing models, faster delivery, and AI-enhanced efficiency.
According to Chaddha, this is where the smart money is going. In the same way that early internet companies succeeded by targeting ignored corners of the market—before gradually scaling into mainstream categories—today’s AI-first service companies should take a similar route. Build credibility in narrow domains, demonstrate ROI, and then expand.
He also points out that the real winners will be companies that blend AI with human oversight, creating “AI teammates” that enhance—not replace—existing staff. These hybrid models will help companies lower costs while improving decision-making quality. In doing so, they could redefine what it means to “consult” in a digital-first world.
A Revolution in Progress, Not Yet Complete
AI disruption in consulting is inevitable, but it’s not happening overnight. While the technology is already automating key functions, replacing trust-based human relationships is a taller order. Startups have a real opportunity to reimagine parts of the $5 trillion services sector, especially by targeting less defended markets. But industry titans like McKinsey will continue to thrive in the short term by evolving alongside AI rather than resisting it.
For founders, investors, and clients alike, the next five years will define how much of consulting becomes a productized, AI-powered service—and how much remains human at the core. Either way, the business of advice is being rewritten. And while McKinsey’s lunch isn’t gone yet, it’s certainly being nibbled at.
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