Are Consultants Failing to Understand AI?

By George Waggott, founder and Roberto Fonseca-Velazquez, law student

George Waggott Law

A recent article published by the Wall Street Journal discussed the struggles which consulting firms have had in coming to grips with the rise of generative AI. Over the past several years, major consulting firms have publicized their investment of billions on AI tools, all in hopes of becoming indispensable partners in the AI revolution. Firms like PwC, Deloitte, KPMG, EY, McKinsey, Bain, and BCG have each publicly confirmed their own aggressive campaigns, touting their ability to help corporations harness generative AI. While specifics vary, each of these launches have promised transformative results. Early on, these pitches seemed effective, fueled by corporate fear of missing out. However, reality has recently revealed a gap between marketing promises and actual delivery.

Clients are now reported to have discovered that many consultants lack deep AI expertise, often possessing no more knowledge than the client’s internal teams. While firms could build proof-of-concept projects, in many cases they have struggled to scale solutions across organizations. This resulting mismatch has led to widespread reports of frustration, with some companies ending engagements and pursuing AI initiatives independently.

Despite these shortcomings, spending on generative AI consulting continues to grow substantially, with the Gartner firm reporting that investment has reached USD $3.75 billion globally in 2024, up from USD$1.34 billion in 2023. Experts predict that consultants may become more effective in four to five years as AI matures and firms develop proven playbooks. Until then, skepticism persists.

Historically, consulting firms regularly excelled at helping clients implement established technologies like cloud systems and ERP platforms. The challenge with generative AI and other AI tools is that there is associated novelty. The resulting is that in many cases consulting firms have not had the time to build up much experience working with the relevant AI tools. Former consultants have in some cases admitted that the AI boom has not generated the surge in demand they anticipated. Many clients report paying millions and receiving lengthy reports on AI trends that do not give them actionable advice or demonstrated results.

Adding to the challenge, organizations today are more digitally savvy, reducing their need for reliance on external advisors. Several companies have opted to develop AI use cases and related tools internally rather than hire consultants. Analysts warn that large firms are vulnerable because they were slow to recruit AI talent, leaving them trying to catch up with the latest AI developments.

Still, consulting firms claim that there is growing demand for their AI-related services, and highlight some successes. KPMG has reported USD$1.4 billion in potential AI-related U.S. projects, up from USD$500 million two years ago. Accenture has reported USD$100 million in new generative AI bookings in the last quarter of 2025, though they also acknowledge that growth has slowed. According to numerous reports, the McKinsey firm remains bullish, telling CEOs that effective AI adoption could double share prices within five years. Yet most acknowledge that few companies are fully leveraging AI’s potential today.

Experts agree that a widespread AI transformation of the economy will take time. Scaling the use of AI tools and determining effective uses to deliver measurable efficiency and revenue gains will be a complex process. Consulting firms may ultimately profit during a “second wave” when AI tools and their use becomes more predictable. For now, many organizations have been left feeling that consultants have over-promised and under-delivered.

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