Consultants keep winning the AI wars

In late June, we discussed how consulting firms had quietly become the big winners of the AI boom.

Accenture generated $900 million, or an annualized $3.6 billion, in GenAI bookings in Q3, compared to OpenAI’s annualized revenue of $3.4 billion at the time. Additionally, Boston Consulting Group, which had $12.3 billion in 2023 revenue, projected that 20% of its 2024 revenue and 40% of its 2026 revenue would come from AI integration projects, and IBM’s consulting arm had booked a cumulative $1 billion from its AI products.

Four months later, the management consulting x artificial intelligence business pipeline remains quite robust, with The Wall Street Journal reporting that OpenAI and Bain have expanded their partnership, allowing Bain to sell industry-specific solutions built on OpenAI to clients:

“At the core of the deal is a team that will build industry-specific artificial-intelligence tools for sectors including retail and life sciences,” said Christophe De Vusser, worldwide managing partner and chief executive of the consulting firm. Bain is putting about 50 employees into the joint effort. OpenAI Chief Operating Officer Brad Lightcap declined to say how many OpenAI team members will be involved.

When I first wrote about Accenture's $3.6 billion generative-AI business, I found it amusing that the only company (besides OpenAI, of course), that had managed to make money on artificial intelligence was a consulting firm. However, looking at it now, these AI x consulting partnerships actually make a lot of sense.

Consulting firms, at the end of the day, are paid to help clients improve their businesses. OpenAI’s models are incredible tools that can help users more effectively organize, understand, and draw conclusions from data, but these models, by default, aren’t fine-tuned to work with specific users’ data.

Yes, an individual can log on ChatGPT and use it as a research tool, but in its basic format, companies can’t just seamlessly integrate ChatGPT with their private data to improve their businesses. While some companies, like fintech unicorn Ramp, have leveraged OpenAI’s models to enhance their own products, other companies either don’t have or don’t want to use internal resources to build their own OpenAI-based tools.

Enter: consulting firms, who are, as we said, paid to help clients improve their businesses. Bain knows OpenAI can be used to improve clients’ businesses, OpenAI knows that enterprise clients are highly lucrative, and many enterprise clients would rather pay Bain to build their OpenAI solutions than develop them internally. It’s really a win-win-win relationship for all three parties.

Shout-out to the consultants. Heads, they win; tails, they still don’t lose.