Are you a consultant? Tell us how much you're spending on AI these days.

As the demand for artificial intelligence tools escalates, many companies are discovering the pitfalls of excessive spending. High-profile executives are beginning to reassess their AI expenditures. Amazon has recently taken steps to curb costs by eliminating a leaderboard that tracked employee AI token usage, which inadvertently encouraged over-spending. Walmart has also implemented restrictions on token usage following the development of a vibe-coding tool for its workforce. Uber's COO Andrew MacDonald expressed concerns about the justification of their AI expenses, while Cisco's Chief Product Officer Jeetu Patel highlighted that the costs associated with tokens are significantly outpacing the value they deliver at scale. In the consulting sector, the rise of AI poses a significant challenge. Initially, chatbots appeared capable of performing many tasks typically handled by consultants, especially those at the beginning of their careers. As a result, consulting firms rushed to aid clients in integrating AI technology, while simultaneously adopting it for their internal operations. KPMG, for instance, has created a dashboard to monitor AI tool usage among employees in its US advisory division, marking a shift from basic adoption to more advanced applications. McKinsey is aiming even higher, with CEO Bob Sternfels revealing plans to deploy about 25,000 AI agents alongside their 40,000 human staff members, with the ultimate goal of having AI support every employee. However, this surge in AI spending raises critical questions about whether companies are making strategic investments or merely spending to keep pace with competitors. Consulting firms are actively exploring these questions for themselves and their clients. According to a recent Boston Consulting Group report, corporate expectations for AI investment are on the rise, with predictions indicating that spending may more than double by 2026, climbing from approximately 0.8% of revenue to around 1.7%. This shift could translate into billions of dollars being funneled into AI initiatives that are still largely experimental and challenging to evaluate. Russell Fradin, CEO and co-founder of Larridin, a platform that assists companies, including major consulting firms, in assessing returns on AI investments, noted that the trend of increased spending is unlikely to slow down. "We haven't heard anyone expressing intentions to cut back on AI spending next year," Fradin told Business Insider. "Rather, the focus is shifting toward understanding how these resources are being allocated." He emphasized that companies are beginning to realize that maintaining a tenfold increase in spending annually is not sustainable.