Consulting firms have long focused on advising clients on adopting new tech, but now the biggest AI giant seems to be keen to adopt advisory skills, as the consultancy sector continues to pivot, writes Maria Ward-Brennan

​Last week it was revealed that Anthropic, the company behind some of the world’s most advanced AI models, plans to launch a new AI consultancy in Europe after partnering with London-based private equity firm Hg.

​Industry consultants told that this was ‘unsurprising’, as the sector has been waiting for this type of move, but it comes at a pivotal time for the consultancy market.

​Over the last financial year, the traditional Big Four giants of KPMG, EY, PwC, and Deloitte posted roughly a two per cent increase in UK revenue. But while general consulting and advisory were in the red, mandatory regulatory work and specialised AI and tech transformation advice drove the growth.

​But it is not just these firms. The same is happening at the MBB firms, as Boston Consulting Group (BCG) reported in April that its global firm reached $14.4bn (£10.6bn), a single-digit increase over the previous year and credited AI for the small growth.​

As a result, the traditional market has shifted its narrative to be labelled as technology firms, following on the heels of Accenture, Capgemini and IBM.

​But these firms rely on bridging complex technology and corporate clients, and now the world’s largest AI provider is in the competing pool.

​Chris Beauchamp, chief market analyst at IG, said: “AI is coming for everything. This is Anthropic parking its tanks on the European consultancy lawn, and it will probably find itself inundated with potential customers.”​

Tech giant eyes IPO with losses

​But what is in it for Anthropic? The plan is for this arm to generate new revenue streams and offset some of its high data centre, compute and infrastructure costs.

​The US tech giant’s anticipated market value is between $1.5tn and $2tn ahead of its long-awaited IPO, but on Monday it also revealed billions of dollars in losses. Revenue surged to $16.3bn in the six months to June, but the company reported a net loss of $80.7bn over the same period, including around $72bn in non-cash accounting adjustments linked to convertible debt and financing instruments.

​Given this, industry experts said they aren’t surprised the tech giant has teamed up with a private equity firm for this venture.

​James Ransome, head of consulting at Patrick Morgan, noted that the partnership “potentially gives the new business an immediate client base through Hg’s portfolio companies, allowing it to demonstrate results and build credibility without having to compete for every engagement from scratch.”

​The deal also comes as external funders have been circling the broader professional services industry.

​But Olly Purnell, co-founder and managing partner of Q5, queried the partnership, noting the consultancy sector needs long-term planning. He said: “Consultants want a multi-decade relationship with clients, and private equity is all about pushing EBITDA results and having an exit after three to five years.”

An in-house sales machine?

Anthropic’s move is not new. Technology firms have launched consulting practices before, including enterprise resource planning (ERP) providers in the 1990s, to improve implementation quality and help address skills shortages.

​Fiona Czerniawska, founder and CEO of Source Global Research, explained that Anthropic’s business model appears to bet on a substantial market for AI consulting and on embedding AI engineers within client organisations.

​“I think by it having individuals in [businesses] producing actual stuff, which gives them a chance to outmanoeuvre the big consulting firms, but it’s all about a search for profits,” she said.

​But what will clients want? A consultancy built by a technology vendor, such as Anthropic, can’t offer genuine independent advice to C-level executives. As experts said, it may end up functioning as an in-house sales tool for the tech giant.

​“What consulting firms are bringing here is not so much independence, but the ability to deploy each of them, depending on what the client wants to see… that makes it harder for Anthropic to develop relationships with clients,” Czerniawska added.

​Professional services firms have also increased their focus on human judgment and people skills as AI expands across the business world. Jeff Soar, founding partner, WTS UK, explained, “It comes down to relationships and history of working together. There needs to still be that human piece, that human interaction.”

As Ransome added, “Developing AI technology and successfully transforming a multinational business are two very different things.”

​Experts have said that although this move adds another competitor to a fast-evolving market, the sector is not quaking at the announcement.

This is reflected in the market, as none of the listed firms, such as Capgemini or Accenture, saw much of a share drop over the weekend. This contrasts with Anthropic’s launch of its new legal tool earlier this year, which sent shares in Europe’s biggest legal software groups tumbling in the weeks that followed.

​Instead, this move can be seen as a positive for the broader UK consultancy market, as the US giant is keen to establish this arm in London and sees ‘Britain as a lucrative market’.