ChatGPT sparked the AI race. Who is winning
AI consultants are small, fast, and driven by AI
ChatGPT sparked the AI race. Who is winning
AI consultants are small, fast, and driven by AI
Consulting co allegedly cited AI-generated research in million dollar report
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ChatGPT sparked the AI race. Who is winning
OpenAI released ChatGPT and accidentally started an arms race. The chatbot hit a million users in five days, forced Google to declare a “code red,” and convinced Silicon Valley that artificial general intelligence was just around the corner and whoever got there first would win big. Microsoft poured $10 billion into OpenAI. Google scrambled to release Bard. China’s tech giants rushed to build their own chatbots. It looked like OpenAI’s race to lose. Now, as ChatGPT’s third birthday approaches, the lead has changed hands so many times the race is starting to look like musical chairs.
OpenAI entered 2025 as the undisputed leader. By late January, it was already under pressure. Chinese startup DeepSeek released models that matched OpenAI’s performance at a fraction of the cost, sending Nvidia’s stock plummeting and raising questions about whether American tech giants had been spending too much on the wrong approach. DeepSeek claimed it trained its model for under $6 million. Even if that was understated, the cheaper approach had shaken up assumptions about what it takes to compete.
Then came summer. GPT-5, released in August after nearly two years of development, was supposed to deliver what CEO Sam Altman called “PhD-level intelligence.” Instead, users got a model that labeled Oklahoma as “Gelahbrin” on maps and couldn’t solve basic algebra. Prediction markets that had given OpenAI a 75% chance of having the best AI model collapsed to 14% in a single hour. Now Google is pressing its advantage. Gemini 3, released this month, has drawn rave reviews.
Yet amid all the frenzy, at least one person warned this would happen. In May 2023, six months after ChatGPT launched, an internal Google document leaked that predicted the ups and downs that were coming. “We have no moat, and neither does OpenAI,” a researcher wrote. Unlike search algorithms or social networks — where data, infrastructure, and network effects create lasting advantages — AI models could be copied, improved upon, and shared freely. The researcher argued that open-source developers would eventually eclipse the big players, that the industry’s obsession with scale was misguided, and that trying to control AI development was a losing game. Google ignored it. So did OpenAI....
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AI consultants are small, fast, and driven by AI
Now, a new wave of AI-driven startups is challenging that dominance, trying to make consulting services more accessible. Many of the founders of these new firms come from the traditional consulting realm. Their experiences not only give them marketable skills but have also helped them identify new opportunities in the industry. They are much smaller than the established ones, often run by teams ranging from just a few people to a few hundred. They’re also more specialized, focusing on areas like pricing strategy, cost reduction, or refining slide decks. And, importantly, they are all in on AI.
Many of them said their methods help them reduce old-school bureaucracy, offer more competitive rates, and make the human side of consulting work easier. Xavier AI describes itself as the world’s first AI strategy consultant.
He said Xavier can provide both strategy recommendations and actionable plans for implementation. “99.9% of businesses could really never afford McKinsey or any of the MBBs,” Filipe told BI. “We created Xavier AI so that anyone could have the power of a consulting firm at their hands when they need it.”
Nexstrat.ai positions its product as a multifunctional agent that can automate many of the typical tasks of a consultant. The platform mirrors the “hypothesis-based problem solving” typically used by consulting firms. Behind the scenes, the platform leverages multiple agents to fulfill the functions of a project manager, a chief strategy officer, and an AI advisor, to help teams make better decisions and solve business issues.
Consulting IQ was born out of the pandemic as an antidote to the number of small and midsize businesses failing. There are an estimated 400 million companies around the world, 99% of which belong in the micro, small, or midsize category, Medone said. But, he said, 65% of small and midsize businesses fade away before year five. “That’s 260 million companies worldwide,” he said....
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Consulting co allegedly cited AI-generated research in million dollar report
A Canadian government-commissioned Deloitte health care report that cost one province nearly $1.6 million contains potentially AI-generated errors, marking the second country this year to allege the consulting firm’s fact-checking shortcomings. The Deloitte report contained false citations, pulled from made-up academic papers to draw conclusions for cost-effectiveness analyses, and cited real researchers on papers they hadn’t worked on, the Independent found. It included fictional papers coauthored by researchers who said they had never worked together. “Deloitte Canada firmly stands behind the recommendations put forward in our report,” a Deloitte Canada spokesperson told Fortune in a statement. “We are revising the report to make a small number of citation corrections, which do not impact the report findings. AI was not used to write the report; it was selectively used to support a small number of research citations.”
“It sounds like if you’re coming up with things like this, they may be pretty heavily using AI to generate work,” Gail Tomblin Murphy, an adjunct professor in the School of Nursing at Dalhousie University in Nova Scotia, told the Independent. Tomblin Murphy was cited by Deloitte in an academic paper that “does not exist.” She added that she had worked with only three of the six other authors named in the false citation.
The revelation comes on the heels of news last month that Deloitte leveraged AI in a $290,000 report published in July to help the Australian government crack down on welfare. But a researcher flagged hallucinations in the 237-page study, which included references to nonexistent academic research papers and a fabricated quote from a federal court judgment. In the revised study, which was quietly uploaded to the Australian government’s website, the consulting firm admitted it had used the generative AI language system Azure OpenAI to help create the report. “The updates made in no way impact or affect the substantive content, findings, and recommendations in the report,” Deloitte wrote in a section in the updated study….