The UK's consulting giants have been dealt a significant blow by the rapid adoption of artificial intelligence (AI), with share prices plummeting in response to investor concerns over their future viability. Accenture, listed on the New York Stock Exchange (NYSE), has seen its value decline by 57% over the past year, while Capgemini, traded on Euronext, has experienced a nearly 40% slump in its share price over the same period. Similarly, London-listed legal group Gateley has witnessed a significant plunge of over 60% in its share value.
Investors are increasingly worried that AI will enable clients to reduce their reliance on costly external consultants, opting instead for in-house technological solutions or more budget-friendly alternatives. This sentiment is casting a shadow over the entire sector, with the 'Big Four' accounting firms (Deloitte, EY, KPMG, and PwC) being closely watched as an indicator of broader industry trends.
While some listed firms have reported revenue growth, these figures have done little to assuage investor fears. Accenture recorded revenues of £14.2 billion in the third quarter, a 6% increase compared to the same period in 2025. IBM saw a 9% rise to £12.1 billion, and Capgemini's revenues grew over 6% to £5.1 billion, up from £4.8 billion in the previous quarter.
Analysts at Morningstar have downgraded firms such as Accenture and Capgemini, citing AI-fuelled uncertainty regarding their future sales pipelines. Michael Field, chief equity strategist at Morningstar, commented that professional services firms are currently in a challenging position due to the looming threat of AI disruption. He highlighted that the falling share prices are raising concerns among shareholders, noting that AI poses a genuine threat to the overall fee pool within the industry.
The consulting industry's long-standing billable-hour system is also under threat as clients expect consultants to leverage technology to automate time-consuming tasks and reduce costs. Firms are being forced to adapt rapidly to this changing landscape, with headcount reductions becoming increasingly common among the Big Four. The shift towards AI-driven solutions is poised to have far-reaching consequences for the industry, with many investors holding back from investing in firms perceived as vulnerable to this disruption.
The UK government's own statistics reveal that the consulting sector has been a major driver of growth in recent years, but the current downturn has significant implications for household finances. As professional services firms struggle to adapt to the AI-driven landscape, clients may face increased costs or reduced access to high-quality advice and support. The sector's ability to innovate and respond to changing client needs will be crucial in determining its future trajectory.
As the consulting industry navigates this complex challenge, it is clear that AI poses a significant threat to traditional business models. The question remains: can firms adapt quickly enough to remain relevant in an increasingly technology-driven landscape?