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In a gold rush, you ought to be the guy selling shovels. That's not a brand new commentary, and it helps explain why Nvidia, the maker of artificial intelligence chips, went from nothing to a market cap of $2.6 trillion. The next best job, it seems, is telling everyone how you can use the shovels. That's where the consulting industry is available in – an early beneficiary of the AI revolution.
The Boston Consulting Group, for instance, expects that a fifth of its revenue this yr will come from AI-related work. With revenue of $12.3 billion last yr, that may be about $2.5 billion. Accenture has booked $2 billion in AI-related projects up to now this yr. There are no shortage of examples of consultants who’re benefiting from the AI gold rush.
This reflects the elemental problem of AI. Technology firms are constructing a large infrastructure backbone. Goldman Sachs estimates that a trillion dollars of investment might be made in the approaching years. Barclays expects that by 2026, the foremost technology firms can have computing capability corresponding to 12,000 chat GPT.
But there aren’t any ideas yet about how this tool ought to be used. Concerns about accuracy, reliability and security are a part of the issue. But overall, firms should not quite sure what to do with this latest tool.
There is movement. One area of growth is service firms that provide AI-powered tools. Datasnipper, which was valued at $1 billion by Index Ventures in February, guarantees to make use of AI to match data for accountants, freeing up talent for more rewarding tasks. However, industry leader OpenAI itself only generates annual revenue of $3.4 billion, highlighting the gap between investment and return.
For firms, adopting this technology is a posh undertaking. Purchasing off-the-shelf services or products helps reduce costs and increase speed, but can also be available to competitors. As adoption increases, the cost-cutting advantages of first movers might be passed on to consumers – especially in industries with fierce competition reminiscent of telecoms or airlines. Another difficulty is that HR, legal and accounting departments could also be unwilling to assist adopt disruptive technologies that will end in worker layoffs.
This creates a distinct segment for management consultants whose job might be to rework entire organizations in order that AI becomes an integral part, not only an add-on. The hope is that these AI capabilities will then result in differentiated services and latest revenue streams that allow firms to recoup their expenses.
While this still looks like a difficult undertaking, the AI revolution relies on it. Otherwise, there may be a risk that the technology won’t reach its potential and cause lack of value for many who have invested in its adoption.
Nevertheless, advisers will undoubtedly proceed to be available to assist take care of the implications.
