The Big Four accounting firms — Deloitte, PwC, EY, and KPMG — have long reigned over the professional services industry, wielding vast revenues, global reach, and extensive service offerings.

However, a seismic shift driven by artificial intelligence could disrupt their business models and erode their market dominance, according to industry experts.

Former PwC partner and now CEO of Qodea, a Google Cloud solutions consultancy, Alan Paton, warns that AI-driven automation is set to transform the sector.

Speaking to Business Insider, Paton predicted that within three to five years, AI could automate highly structured, data-intensive tasks in audit, tax, and strategic advisory, potentially eliminating 50% of roles at these firms.

He cited existing AI solutions capable of handling 90% of the audit process as evidence of the technology’s rapid advancement.

The implications for the Big Four are stark. “Clients will question why they’re paying top dollar for answers they can get instantly from a tool,” Paton said.

He cautioned that unless Deloitte, PwC, EY, and KPMG pivot to highly specialized services, their profitability could face a “huge reduction.”

Some believe AI won’t make consultants and accountants obsolete but will instead automate routine tasks, allowing these professionals to focus on higher-value work.

“AI frees up consultants, but it will never replace them,” said Casey Foss, chief commercial officer at midsize firm West Monroe.

As AI advances, businesses will still need human expertise, she said, emphasizing that it’s not a “set it and forget it” solution.

There will always be a need for someone who can take a holistic view of problems and bring in the nuanced judgment—the “expertise of the gut feel”—that AI can’t replicate.

The impact of AI on job roles is a concern across all consulting firms, but some industry insiders suggest it could also challenge the very foundation of the Big Four’s business model.

“No one is more exposed to AI disruption than the Big Four,” said Foss.

AI is driving down price points, which could reduce revenues, and it’s shifting client expectations toward outcomes-based pricing instead of the traditional billable hours model long used by the Big Four, she said.

According to Foss, firms need to be agile to adapt to these shifts at scale, while also upskilling their workforce and reimagining their service offerings.

For large organizations like EY, KPMG, PwC, or Deloitte, making that pivot is “definitely harder,” she added.

Offshoring, a longtime cornerstone of the Big Four’s business model, may turn into a disadvantage.

Their revenue has traditionally depended on junior-heavy teams and labor arbitrage—outsourcing work to lower-cost regions, particularly in Asia.

But as AI changes how services are delivered, this model may face growing pressure.

“If work can be done using AI, where you don’t need to have an office in Indonesia, you can actually deliver it from the UK into those services, then I think these companies are going to be deeply challenged,” said Paton.

He said that if your service delivery depends on the number of people you have, “you’re really vulnerable.”

In May, PwC cut about 2% of its US workforce, mostly from audit and tax departments.

As AI disrupts the Big Four’s traditional model, it’s becoming a major advantage for mid-market consulting firms.

“AI is a necessary enabler for these firms to proliferate and prosper,” said Alibek Dostiyarov, a former McKinsey consultant who is now CEO of Perceptis, a startup that provides AI solutions to smaller firms to streamline “mind-numbing” consulting tasks.

Automation helps smaller firms overcome challenges like a smaller workforce and lack of sophisticated tools, while enabling employees to work more efficiently, Dostiyarov said.

He noted that clients using Perceptis can handle around 10 to 12 project inquiries, compared to only two or three before.

Others argue that the Big Four’s size and expertise make it inevitable they will successfully navigate AI disruption.

The four firms have poured billions into AI, far exceeding the resources available to smaller competitors.

In 2023, KPMG revealed plans to invest $2 billion in AI and cloud services over the next five years, aiming to generate more than $12 billion in revenue.

Innovation leaders at EY and KPMG told BI that their extensive scale and wide range of services give them a competitive advantage in providing integrated AI solutions to clients.

“While small firms may move quickly, we are uniquely positioned to deliver enterprise-grade AI solutions, manage risk, and integrate technology across global operations,” said Cliff Justice, a key figure in KPMG’s global AI program.

Justice acknowledged that AI is disrupting traditional business models but argued that predicting it will end the Big Four’s dominance overlooks their structural advantages, strategic positioning, and capacity to adapt at scale.

Raj Sharma, EY’s global managing partner for growth and innovation, told BI that the firm’s wide-ranging operations make it an ideal “test bed for innovation.”

“Our strength is in our ability to bring to clients more than 100 years of deep sector experience and quality data sets, human-centered and supported by the collective knowledge of 400,000 skilled professionals,” Sharma said.

Both leaders also emphasized that their deep expertise is crucial for navigating the growing ethical, security, and regulatory compliance challenges posed by AI.

PwC’s Chief Technology Officer, Umang Paw, said the firm is “more than ready” for this “moment of reinvention.”