For decades, the consulting and technology industries have worked hand in hand. Silicon Valley develops new technologies, and large consulting firms help companies implement them.
However, the latest advances in AI are changing that relationship.
As companies like OpenAI and Anthropic churn out AI models, a cottage industry of “consulting technology” startups is emerging. Some companies are using AI to help consultants do their jobs more efficiently, while others are looking to eat their lunch.
Interest in such companies has increased in Silicon Valley over the past year, multiple investors told Business Insider.
Thomson Nguyen, co-founder and managing partner of venture capital firm Saga, said it is unlikely that these AI consulting startups will compete with established companies. “If you’re a Fortune 500 company building AI infrastructure for your call center, you’re still going to hire the Big Four, and you’re going to have the budget for it,” he said.
A more likely scenario, he said, is that these startups will cater to mid-sized companies with annual revenues of less than $100 million, which are too small to hire McKinsey or Bain.
PromptQL, an enterprise platform launched by open source unicorn Hasura, aims to automate some of the typical consultant tasks. This helps clients build custom AI analysts by integrating internal data with the underlying models they already use. Once deployed, these AI analysts will be able to perform tasks typically handled by data scientists and engineers, and will be able to continuously learn and adapt to their environments over time.
PromptQL also provides access to a team of expert engineers to help companies operate AI analysts and develop broader AI transformation strategies for $900 per hour.
“It’s not as good as a McKinsey consultant, but it’s immediate,” PromptQL co-founder and CEO Tanmai Gopal told Business Insider.
He later told Business Insider that the platform’s “killer feature” is its ability to provide “AI accuracy at scale without having to prepare messy data or move it elsewhere.”
Gopal said he has noticed that the consulting technology sector has grown significantly in recent months.
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“This is the year we start to see increasingly specialized AI, AI that can learn, AI that can absorb business context,” he said. This means there is a huge opportunity for AI analysts, he said. “That’s definitely emerging, because that’s where the most valuable problems are.”
Tomasz Tunguz, general partner at investment firm Theory Ventures, told Business Insider that he has seen a flurry of consulting-focused AI startups emerge over the past nine months. He said he has met with some people but has not made any investments yet.
Still, he said he noticed five patterns. He said there is a growing segment of AI startups that support call centers and automate customer service, technology consulting startups that focus on AI and software implementation, startups that develop tools to automate accounts payable and receivable, management consulting startups that build strategic and operational AI systems, and finally, executive coaching startups.
Many of these companies have raised funding in the past few months.
Parable, an AI-powered intelligence platform that helps companies track how their employees spend their time, announced a $16.6 million funding round in September. Profound, an answer engine optimization platform, announced a $20 million raise in August. Dialogue AI, which automates market research, announced Friday that it has raised $6 million.
Xavier AI, which bills itself as the world’s first AI strategy consultant, has raised a seed round that it expects to close in the coming weeks, co-founder João Filipe told Business Insider.
“While the overall AI landscape can be said to be highly competitive, the opportunity is huge. Rather, it’s about finding the type of investor with the right fit and background to understand this problem (not only focused on AI, but also with industry expertise),” he wrote.
The space-based founders say their aim is to democratize access to consulting services, not replace human work.
“The type of consulting that McKinsey consultants do still exists,” Gopal said. “It’s not so much about company data, it’s about other things. It’s about the network.”
