Inside McKinsey: How AI Is Triggering an Existential Shift in Consulting
August 3, 2025 – McKinsey & Company, the world’s premier management consulting firm, is confronting what senior leaders describe as an existential crisis driven by the rapid advance of artificial intelligence (AI). As AI technologies increasingly automate tasks once performed by highly paid consultants, McKinsey is overhauling everything from client engagements to workforce strategies to stay relevant in an industry under seismic change.
Kate Smaje, a senior partner leading McKinsey’s AI initiatives, recently characterized the impact of AI on consulting as an “existential challenge,” underscoring the urgency within the firm. This transformation is evident in McKinsey’s deployment of thousands of AI agents designed to assist consultants with tasks such as creating presentations, summarizing client interviews, and synthesizing research data. The integration has begun reshaping the very nature of consulting work, blurring traditional human roles with advanced machine-driven analyses.
Bob Sternfels, McKinsey’s global managing partner, has affirmed that the firm is undergoing a substantial shift to embed AI capabilities deeply within its operations. This evolution compels McKinsey to rethink how it delivers value to clients, shifts its hiring priorities, and even selects the engagements it pursues. The firm’s embrace of AI aims to combine technological efficiency with the human creativity and strategic insight consultants historically provided.
The AI Disruption: Challenges and Opportunities
The rise of AI-powered tools based on machine learning and natural language processing means consultants are no longer the sole source of strategic analysis. AI can rapidly analyze vast datasets, generate insights, and propose recommendations that were once the exclusive domain of expert consultants. This shift threatens to reduce demand for traditional consulting services, especially routine tasks such as market research and data analysis, potentially challenging historic revenue models based on billable hours.
However, leaders like Smaje also frame AI as an opportunity to elevate the consulting profession. With mundane tasks increasingly automated, consultants can focus more on creative problem-solving, strategic thinking, and client engagement skills—areas where human judgment remains crucial. Firms that can retrain their teams to leverage AI tools effectively while honing these uniquely human capabilities may secure a competitive advantage in the evolving landscape.
AI’s Limitations and the Human Element
Despite AI’s growing capabilities, voices within and outside the firm caution that certain aspects of consulting are unlikely to be fully automated. Elon Musk, CEO of xAI, recently remarked that AI is not poised to replace consultants entirely, noting that one core value consultants provide is external validation for CEOs’ decisions. This role includes absorbing responsibility or blame for complex strategic choices—something corporate leaders sometimes expect from human advisors but may be reluctant to assign to AI systems.
Indeed, industry observers note that in many organizations, consulting firms historically function as a buffer allowing executives to deflect responsibility for outcomes. While AI tools can provide analysis and recommendations, they lack the capacity to act as such scapegoats or assume accountability, an important factor that could preserve some demand for human consultants.
Adapting to the Future
McKinsey’s internal discussions reflect an acute awareness of this challenging new reality. The firm is making significant organizational changes: redesigning workflows to exploit AI’s strengths, placing senior leaders in charge of AI governance, and accelerating hiring and training in AI-related skills. According to recent surveys, large companies including McKinsey are leading efforts to embed AI strategically to generate tangible business impact while mitigating risks associated with its adoption.
The coming years will likely test McKinsey’s ability to blend AI efficiencies with human insight to maintain its global consulting leadership. Whether other firms will follow suit or face disruption themselves remains a closely watched question in business circles worldwide.