PwC has lowered prices for certain services due to increased efficiency from AI.

The move came after clients requested pricing changes, recognizing the firm’s use of AI to streamline work.

“Clients would hear us talking about using AI and say, ‘We want our fair share of those efficiencies,’” said Dan Priest, PwC’s chief AI officer.

He added that the firm has passed on some savings to clients where applicable.

PwC said it aims to align AI-driven efficiencies with client benefits, including cost savings and timely service.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Consulting’s pricing revolution follows a predictable AI adoption curve

PwC’s experience mirrors a broader pattern in the consulting industry, where initial AI implementation leads to efficiency gains that clients expect to share in through lower prices.

The AI consulting market is projected to reach $72.5 billion by 2025, growing at a remarkable 40.3% CAGR from 2020 to 2027, creating significant pressure to demonstrate value beyond cost savings 1.

This efficiency-to-value shift matches data showing AI applications improve operational efficiency by an average of 35% across consulting projects, gains that initially translate to price reductions 1.

PwC’s statement that price cuts have “plateaued” as they focus on “value creation” reflects the natural evolution beyond the initial efficiency phase, where consulting firms must justify their fees through enhanced services rather than just completing the same work faster.

Industry data shows 86% of consulting buyers now seek AI-integrated services, indicating clients increasingly expect AI capabilities as standard rather than premium offerings 2.

2️⃣ AI is reshaping consulting’s traditional pyramid business model

PwC’s pricing adjustments highlight how AI is fundamentally challenging the time-based billing model that has underpinned consulting economics for decades.

Traditional consulting firms operate on a pyramid structure where junior staff perform time-intensive analysis work billed by the hour, but AI automation is now handling many of these tasks in a fraction of the time 3.

This structural shift is prompting major consulting firms to explore alternative revenue models, including value-based pricing that aligns fees with client outcomes rather than consultant hours 4.

The tension between efficiency and billing is particularly acute in system integration work, where PwC’s AI Chief noted approximately 30% efficiency improvements – gains that clients naturally expect to benefit from financially.

Industry experts predict this transformation will accelerate, with some forecasting that traditional consulting models may become obsolete by 2030 as client expectations and AI capabilities continue to evolve 5.

3️⃣ Client empowerment through AI is forcing consultants to redefine their value proposition

PwC’s pricing strategy reflects a broader industry challenge as AI tools increasingly empower clients to perform analyses that previously required external consultants.

The democratization of AI capabilities is eroding the knowledge arbitrage that consulting firms traditionally held, enabling sophisticated clients to generate insights internally rather than paying premium rates for external expertise 5.

This shift has transformed client expectations, with data showing organizations now demand more than just insights – they expect consultants to deliver actionable strategies and measurable outcomes that justify their fees 1.

PwC’s emphasis that “the biggest benefit for our clients is much more than price” directly addresses this challenge, highlighting how consultants must articulate value beyond efficiency gains.

Research indicates consulting firms must evolve toward collaboration and technology-enabled independence for clients, focusing on building internal client capabilities rather than creating dependency relationships 5.

Recent PwC developments

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