British businesses are reducing their expenditure on consulting firms, opting instead to utilise artificial intelligence (AI) for problem-solving, a new Business Spend Pulse by City AM indicates. The tracker found that median spending on consulting fees dropped by 1.9 per cent in August compared to the previous year.
This reduction occurred despite an overall 2.2 per cent increase in corporate spending. The number of businesses adopting AI has almost doubled, with one in seven firms now investing in AI companies, up from one in thirteen last year.
Spending on professional services as a share of total expenditure fell by about a tenth. The proportion of businesses paying professional services firms also declined by approximately one percentage point to 18.6 per cent, marking the most significant drop in any category.
The data, shared exclusively with City AM by Capital on Tap, is based on millions of card transactions from over 300,000 British businesses. London leads in AI adoption, with around one in five firms in the capital spending on AI services.