IBM’s consulting chief warns AI will ‘implode’ unprepared rivals
IBM Consulting, under Mohamad Ali, claims to have surged ahead in AI by pioneering a human-plus-digital workforce and transforming its own operations before selling innovative solutions to clients, leaving less-prepared consulting rivals scrambling to keep up, writes Maria Ward-Brennan.
IBM’s consulting chief, Mohamad Ali, warns that AI will “implode” unprepared rivals, claiming the group has an 18‑month lead in the race because its competitors initially followed a different approach when GenAI first hit the market.
The consulting arm is backed by IBM, one of the world’s most famous tech titans and the holder of the blueprint for the modern-day PC, a backing not many other consultancy giants can brag about.
IBM Consulting generated $21.16bn (£15.8bn)in revenue for the full-year 2025, representing a 1.8 per cent year-over-year increase from 2024. It has recently generated $5.27bn (£3.9bn) in revenue for the first quarter, reflecting a 4 per cent year-over-year increase.
“What a lot of our competitors did three years ago when AI hit the market is they went out, and they bought large quantities of licences…and they said, ‘go be productive’ and well, it didn’t work… we actually took a completely different approach, but [we] didn’t realise that our approach was so different at the time,” Ali told City AM.
Instead, IBM rewired its own cost base with a “human plus digital labour” strategy. The group’s strategy is to pair human consultants with fleets of ‘digital workers’ (agents) running on a common platform, rather than just handing staff generic LLM licences.
But good timing has been on IBM’s side. Ali, a software developer by trade, rejoined IBM in 2023 after serving as the chief executive of IDG and Carbonite after getting a call from the group’s chief executive. At the time, the business was fresh from rebranding its professional services unit to ‘IBM Consulting’. Around the same time, OpenAI’s ChatGPT was publicly launched, sparking a global boom in AI.
Ali, who had no professional services experience, made his first move when he took over the leadership role, which was to lean “extraordinarily hard in building out this digital labour platform”. He went out to stack the leadership team at the consultancy arm with senior figures in the sector, including PwC’s former vice chair, Neil Dhar, to lead the Americas, and Andy Baldwin, a former EY senior, to take on the number two role.
“We’re hiring people from the IBM software division..Google, [and] from… Microsoft… to effectively rapidly innovate,” he added.
Overhaul drove billions in savings
The group’s internal process was to re-engineer its own balance sheet before selling the methodology to clients.
“We took 70 most promising [workflows] that represented about $25bn of spend every year… That $25bn is today around $20bn, we have reduced that spend, and… our free cash flow went from $9bn to $13bn… we’ve had revenue growth, and the stock price has more than doubled,” he explained.
One of his examples was his group’s work on reducing NHS appointment no-shows, in which IBM deployed a human-plus-digital workflow across three hospitals. The NHS can now see 600 more patients per week by accurately predicting and managing appointment no-shows.
The group is also currently taking apart and rebuilding the UK’s $2bn (£1.5bn) emergency services network (police, fire, ambulance) from a dedicated warehouse, handling everything from 5G towers to server infrastructure and mobile apps.
As with everything in AI, safeguards need to be in place to ensure quality and prevent hallucinations. As a result, IBM teamed up with UK-headquartered education giant Pearson to certify its digital workers. As AI agents can easily memorise multiple-choice tests, Pearson builds a complex, dynamic testing environment to score their real-time problem-solving abilities.
Only those prepared will survive
Ali warned of the consulting market “falling out” as unprepared rivals face a tough position on pricing. With clients pushing for discounts on massive AI-driven projects, Ali warned that desperate consulting firms are signing these deals with no infrastructure to back them up.
“We have competitors… who will say you could do it for $70m, and they have no idea how to do it… I believe there’s going to be a falling out at the bottom. A number of these companies are going to struggle, and some of them are going to implode,” he explained.
Ali added, “We will be able to deliver them at the margins that we set because we know how to use the AI.”
The consulting chief also pointed out the gradual decline in clients’ appetites for PowerPoint presentations, a norm of the traditional consultancy model. He highlighted that the new guard is using live factory dashboards to track the performance of a fleet of autonomous digital workers operating across global accounts.
This explained why, when he took over, a software developer at heart, he first created a live execution and monitoring platform, internally named IBM Consulting Advantage, that monitors all projects its digital workers are on for clients.
Ali insists that to remain competitive, you must continue to innovate. However, he remains positive about working in the AI world. “We used to build hundreds of software apps… then hundreds of thousands of mobile apps… and now we’re going to be building billions of agents for clients, and so I actually think the work is just going to continue to expand,” he stated.
He added the real battle is not whether work disappears, but over which firms are set up to capture it.