Why AI Like Grok 4 Should Replace Consultancies
- Tom Mostert
- Jul 14
- 5 min read
For decades, management consultancies like McKinsey&Co and Bain have shaped corporate strategy, wielding influence over some of the world’s largest organizations. Yet, their track record is marred by high-profile failures that reveal deep flaws in their models — flaws I’ve seen firsthand in my career while working alongside these firms. With the advent of advanced AI like Grok 4, developed by xAI, a compelling alternative emerges: one that promises objective, data-driven insights at a fraction of the cost.
We’ll analyze two specific consultancy failures (Purdue Pharma and Sears), though there are actually countless more examples, as well as survey real-time takes from X on AI replacing consultancies, and estimate Grok 4’s API costs for enterprise use. The evidence suggests that AI could indeed challenge the consultancy industry’s dominance.
Consultancy Failures: Purdue Pharma and Sears
Purdue Pharma: A Cautionary Tale
The Purdue Pharma case stands out as a glaring example of consultancy missteps with devastating consequences. The management consultants, who shall remain anonymous but you might venture an educated guess, advised Purdue on strategies to maximize OxyContin sales, including targeting high-prescribing physicians and minimizing the drug’s addiction risks. These tactics fueled the opioid epidemic, contributing to hundreds of thousands of deaths across the United States. There are now documentaries on Netflix dramatizing these events.
The fallout was severe: The offending consultants paid nearly $600 million in 2021 to settle investigations by 49 states, followed by an additional $650 million in 2024 to resolve federal probes. In the latter settlement, they acknowledged responsibility for “turbocharging” opioid sales, while a former senior partner pleaded guilty to obstructing justice by deleting related documents.
This case exposes a critical flaw in the consultancy model: profit-driven advice can prioritize client revenue over ethics or societal impact. The settlements, while substantial, pale in comparison to the human cost—highlighting a lack of accountability that AI, unbound by financial incentives, could potentially avoid.
Sears: Missteps and Missed Opportunities
Sears, once a retail titan, offers another lens on consultancy limitations. In the early 2000s, one of these consultancies with god-like influence advised Sears to refocus on its core retail operations and shed non-essential assets. However, the company’s leadership pursued a different path—emphasizing financial engineering and aggressive cost-cutting over retail investment. By 2018, Sears filed for bankruptcy, its decline marked by strategic missteps.
While the consultants' recommendations weren’t directly responsible, the consultants stepped back, not taking responsibility for any follow-through, and creating a disconnect between their advice and Sears’ execution, which underscores a key weakness: these consultancies can propose radical strategies, but their impact hinges greatly on the clients' implementation. In my experience, this gap often leads to ugly consequences — wasted resources, misaligned priorities, and, in Sears’ case, collapse. AI tools like Grok 4, integrated directly into enterprise workflows, could bridge this gap by providing real-time, actionable insights tailored to execution, and the ability to align feedback and process updates which will aid continuous tweaking and tracking of milestones.
ESKOM: State Capture and Corruption in South Africa
The same offending global consultancy used by Purdue played a controversial role in South Africa’s state capture saga during Jacob Zuma’s presidency, a period marked by widespread corruption orchestrated by the Gupta family. State capture refers to the manipulation of state institutions by private interests for personal gain, and in this case, the Guptas used their influence over Zuma’s administration to extract funds from state-owned enterprises (SOEs) like Eskom, South Africa’s power utility.
The Zondo Commission heavily criticized the consultancy for its role, pointing to both the lack of oversight in selecting its partnerships and the exorbitant fees charged for its services. These actions contributed to Eskom’s financial woes, exacerbating the impact of corruption and mismanagement at the utility company. Facing public backlash and legal scrutiny, the consultancy denied any intentional wrongdoing, claiming it was unaware of it's business partner’s ties to the Guptas. As a gesture of accountability, the firm repaid the fees it had earned from the Eskom contract, though this did little to repair its damaged reputation in South Africa or the billions lost in corrupt dealings.
The management consultant’s involvement in the state capture saga highlights the risks consulting firms face when operating in politically volatile environments without robust ethical safeguards. The scandal underscored how the firm’s pursuit of profit—charging high fees for questionable work—intersected with the Gupta family’s looting of state resources, leaving a lasting stain on the consultants' global image and raising questions about accountability in the consulting industry.
Public Sentiment on AI Replacing Consultancies
Recent posts by Tesla and X founder - Elon Musk - has resurfaced a long-held sentiment that these consultancies are becoming redundant. To gauge current perspectives, I turned to X (Twitter) for real-time takes on AI displacing consultancies. The sentiment is polarized but revealing.
Optimists See Disruption: Users like @Zayphar proclaim, “The #Consulting Crash Is Coming. Bloated, overpaid, and outpaced by AI—big consulting firms (@McKinsey & Company, Boston Consulting Group (@BCG ), and @BainandCompany ) confront a future they can’t outsource.” This reflects a growing belief that AI’s efficiency and scalability threaten traditional firms.
Skeptics Highlight Limits: Others push back, arguing, “AI can process data, but it can’t navigate corporate politics or persuade stakeholders. Consultancies will adapt, not disappear.” This view aligns with analyses debunking the myth of AI fully replacing human consultants, noting deficiencies in emotional intelligence and strategic nuance.
The split mirrors debates I’ve encountered professionally: AI’s potential is undeniable, but human dynamics remain a hurdle. Still, the “ugly consequences” of consultancy advice—often rooted in human bias or misaligned incentives—suggest AI’s objectivity could tip the scales, provided that enterprises nurture the appropriate leadership capabilities.
Cost Estimates for Grok 4 in Enterprise Use Cases
Cost is a decisive factor in evaluating AI as a consultancy alternative. Let’s estimate Grok 4’s API costs for an enterprise scenario and compare them to traditional consultancy fees.
Hypothetical Use Case
Imagine a large corporation using Grok 4 to develop strategic recommendations for a major initiative—analyzing datasets, running simulations, and generating reports. Based on xAI’s API pricing structure (which typically includes a base fee plus usage charges), here’s a rough breakdown:
Base Subscription: $10,000/month for enterprise access. This is generally cheap compared to most enterpise-wide AI services.
Usage Charges: $5,000–$10,000/month, depending on data volume and computational complexity.
Total Monthly Cost: $15,000–$20,000.
Annual Cost: $180,000–$240,000 (roughly the cost of ONE typical enterprise platform subscription for a company with 10,000 employees).
Comparison to Consultancies
Contrast this with a typical McKinsey engagement: a six-month strategy project often exceeds $1 million, factoring in partner rates (up to $20,000/day) and team expenses. Even accounting for personnel needed to interpret Grok 4’s outputs, the AI option slashes costs by an order of magnitude.
Implications
At $180,000–$240,000 annually, Grok 4 offers a compelling economic case—especially for firms burned by consultancy fees yielding questionable results. While AI lacks the human touch of a consultant’s pitch, its affordability and data-driven approach could mitigate the risks of flawed advice I’ve witnessed too often.
With strong internal leadership, training, and ethical oversight, there are no significant cons to replacing consultancies with Grok 4. The consultancy model is indefensible—wasteful, unaccountable, and often harmful. The top 2 consultancies posted revenues of $25Bn in 2024, so imagine redirecting those billions to R&D, upskilling, or consumer benefits, It is not just viable but imperative. Grok 4, paired with empowered internal teams, could usher in a leaner, more effective era of business strategy.
Conclusion
My career experience with consultancies has shown me their potential for harm, sometimes unintentional, sometimes hidden malace—whether through profit-chasing missteps like Purdue Pharma or execution failures like Sears. There are hundreds of similar cases, corporate and geopolitical, with a staggering human toll in terms of lost job opportunities and even lives, and they highlight a model prone to bias, disconnect, and inefficiency.
Cost-wise, Grok 4’s estimated $180,000–$240,000 annual enterprise price tag dwarfs the millions charged by firms like McKinsey, offering enterprises a leaner, more objective option. AI like Grok 4 won’t replace consultancies overnight—human skills still matter. But as someone who’s seen the “mostly ugly” consequences of consultancy advice, I see AI as a disruptor worth betting on. Its evolution could redefine corporate strategy, leaving traditional firms scrambling to justify their value.