AI At Warp Speed And Accelerating
The writing is on the wall for the Big Four — Deloitte, PwC, EY, and KPMG.
AI is coming for them hard, and there is not much they can do but adapt.
One trend that many in the business world are coming to terms with is that AI will have an unbalanced effect on those who are exposed to it.
Some professions will stand the test of time, but one that is glaringly overplaying its hand is accounting and consultancy.
The Big 4 have had a near monopoly of this type of activity for decades, and that is about to die a tragic end.
The American economy is changing at such a fast pace that CEOs are getting fired at a record pace, because they are unable to keep up with the management and strategic decisions that make or break these corporations.
The stakes are even higher at tech companies that are in the middle of chaos, and one little tweak in an algorithm or software code can implode their company in seconds.
How is that for pressure?
This all points to technology becoming a winner-takes-all phenomenon, and this concept is accelerating at a rate that not many can comprehend.
What does this mean?
Corporate profits for the winners and bankruptcy for the losers.
The Big 4 face a stark future of lower revenue and higher competition, eaten alive by the forces that are AI.
Then throw into the equation that American corporations face a scary business climate offshore.
The Big Four, who advise companies on how to navigate change, will now need to advise these same companies to avoid the Big Four because they provide little incremental value.
Who will scoop up the consultancy business?
Tech companies from the Nasdaq index ($COMPQ).
It is almost guaranteed that AI-driven automation will bring major disruption to key service lines and drive “a huge reduction” in profits.
AI will run these within the next three to five years, eliminating about 80% of roles.
No more big paydays for workers from Big 4 accounting firms, and this is making waves inside those firms.
Businesses do not need human expertise anymore as AI develops — it’s a “set it and the AI will improve itself from the data” solution. There won’t be much reason to employ a human in audit or consultancy.
The Big Four have built their healthy revenue streams on junior-heavy pyramids, with an increasing degree of labor arbitrage, often in Asia.
Automation diminishes smaller firms’ previous disadvantages, like lacking an army of talent or advanced internal tools, while empowering employees to be more productive.
Big tech will be all over this trend while firing most of their staff, too.
Big tech leaders said their deep expertise was necessary for handling the increased ethical, security, and regulatory compliance challenges created by AI.
Buy the dip in the best of AI and watch as they take over accountancy, consultancy, business development, and many other industries and subsectors.
They will also get rid of most of their staff, and the remaining will enjoy much higher salaries than today.
I am bullish on AI companies and bearishon the volume of white collar jobs.
