Generative AI is a classic example of an early-stage, inchoate market in which the shape and extent of demand is very uncertain and could develop in different directions. In the professional services space, unpredictability is amplified by fuzzy definitions (not all AI is actually AI) and by clients whose needs can turn on a dime (and there are plenty of reasons for them to change in the current economic environment).  

The initiatives announced by firms in the last couple of months raise two questions: How big and fast-growing is the market for generative AI likely to be? What actions should firms take to ensure that their share of the future market will be sufficient to cover the investments they’re planning to make? 

To begin with the first of these questions, our research suggests that the level of interest in generative AI among client organisations is unmistakably high. Eighty-five percent of respondents (all of whom were CxOs and their direct reports who engage in buying professional services) said that their organisations had already started to at least experiment with ChatGPT and other, similar tools. Most of this activity is currently happening in the data & analytics and technology spaces, but one in five organisations say they’re already using generative AI to some extent in their operations, and one in 10 in strategy work. However, only 14% of respondents overall described their use of this technology as “extensive.” What we’re really seeing here is a rapid spread of diffuse experimentation, rather than anything centrally planned. 

Why all the activity? Part of the reason is the technology itself: For at least the last century, business has been all about numbers; generative AI is about language, creating new and intriguing avenues to explore. But the environment in which that technology has landed matters, too: Just over 60% of organisations, according to our research, are very short-staffed, 83% say their overall workload has increased, and 81% that they’re having to work faster than they did a year ago. Generative AI offers the tantalising promise of solving these issues, allowing businesses to work both better and faster, just as spreadsheets did for number-crunching in the 1980s.

However, generative AI raises issues that spreadsheets never did. Asked to identify the likely challenges of adopting this technology in their organisation, 38% of clients cited the lack of clarity around AI regulation and 25% the lack of AI-specific skills, with a similar proportion (24%) pointing to the need to better understand how to best use it in practice. None of this is helped by the fact that 26% of respondents—all themselves senior executives—thought that a lack of engagement at the top of their organisation is likely to be a problem.

To combat these challenges, clients expect to invest both money (51% of organisations say they plan to make a significant investment in this space) and effort (55% say they anticipate making significant investments in terms of time and resources).  

Some of that investment will end up being spent with consulting and other professional services firms. Sixty percent of client organisations say it’s “very likely” that they’ll turn to consulting firms for advice around the use of generative AI, and 52% say they’ll do so when they come to implement generative AI tools in their organisation.  

We don’t know what that will translate into in terms of revenue for professional services firms because it’s not yet clear how big generative AI consulting projects will be. It’s possible that this technology rapidly becomes embedded in work, much as spreadsheets did, making the market intense but short-lived. But the practical, ethical, and legal issues tied up with widespread AI adoption suggest that the rapid rollout of generative AI in businesses will create as many challenges as it brings solutions.  

Which brings us to our second question: Given this market is at a very early stage, what can professional services firms do now to maximise their future market share?  

Although our data suggests that a sizeable proportion of clients will turn to them for help, consulting firms won’t necessarily be clients’ first port of call. Forty-four percent of clients say that, in order to understand the potential of the generative AI market, they’ll use research by high-tech companies such as Google, Amazon, and Apple, and a similar proportion expect to use research by the companies that make generative AI tools. By contrast, only 31% say they’ll turn to consulting firms for this type of research.  

Where clients do elect to use a consulting firm for advice and implementation support around generative AI, their decision about which firm to work with is more likely to be influenced by a firm having a strong brand in emerging technologies in general, rather than in generative AI more specifically. This suggests that clients assume—probably quite rightly—that at this early stage in the adoption of generative AI in business, no one firm knows much more than any other. It may also be that clients are more interested in firms that have experience of applying other new technologies in practice.  

All this, we think, points to three things consulting firms should focus on if they’re win a significant share of this market as it matures:  

• Publishing research on generative AI is a good starting point, ideally in collaboration with a major technology company and/or AI technology specialists. We think this makes more sense than diving in with a generative AI sub-brand. True, Deloitte Digital unquestionably gave Deloitte a head start in the digital transformation market. But digital transformation effectively replaced and repurposed existing large-scale technology programmes, whereas it’s too early to tell whether generative AI will follow the same pattern. 
• Second, consulting firms need to balance this technology-led research with analysis and commentary on the challenges clients will face in implementing generative AI: Issues such as the emerging regulatory landscape are topics consulting firms are better-placed to discuss than pure technology players.  
• Finally, consulting firms need to demonstrate how they’ve helped organisations exploit leading-edge technology in practice. As one client we interviewed put it, “We want to know what will work.” That’s the market consulting firms need to focus on.