EY, BCG, Accenture, Booz Allen are making serious $$$ from U.S. government!

• Consulting firms like Accenture, Boston Consulting Group, Deloitte, EY, KPMG – have thrived on federal contracts—earning $18Bn—up from just $5B a decade ago. (Source: The Economist)
• But Elon Musk’s DOGE (Department of Government Efficiency) is on a Mission? Cut $2 TRILLION in government spending.
• Guess who is the big target? Overpriced consulting firms.
• U.S government is turning to AI-driven solutions like Palantir Technologies.

According to data from The Economist – Consulting Firms’ Earnings from the U.S. Government exceeds $18 billion….

EY: Earned nearly $70 million since 2020 for a reform initiative at the Department of Housing and Urban Development (HUD).

Boston Consulting Group (BCG): Secured $380 million since 2022 from the Defense Health Agency to support its “Workforce 3.0” initiative.

Accenture: Bagged $700 million from the Department of Education since 2019, developing and maintaining a student aid website, mobile app, and virtual assistant.

Booz Allen Hamilton: A true public-sector powerhouse, with $9 billion from the federal government in the last fiscal year alone. They derive nearly all their revenue from public-sector contracts!

After its association with opioid manufacturers, McKinsey’s exposure to federal contracts has become minimal, generating less than 1% of its global revenue from these deals.

On average, the federal government accounts for about 8% of the revenue across these firms, making it the single largest client.

The Disruptor: Palantir, AI-powered consultant

While traditional consultancies face potential cutbacks, Peter Thiel’s Palantir is rising.

The AI-driven analytics firm, known for its deep ties to the Department of Defense, saw its government revenue skyrocket 45% year over year in Q4 2024.

Since Trump’s re-election in November, Palantir’s stock has more than doubled, while firms like Booz Allen Hamilton have seen sharp declines.

Why Palantir is Winning the Government’s Trust

Unlike traditional consulting firms that rely on advisory services, Palantir integrates AI into government operations, streamlining data and eliminating inefficiencies.

Musk and Thiel believe traditional consulting is a “total racket.” Palantir’s technology reduces the need for external consultants, allowing agencies to run leaner.

While Palantir still collaborates with firms like Accenture and Deloitte, many experts believe it will soon replace them as the go-to AI-driven consulting powerhouse.

What’s Next?

With Palantir rising and DOGE pushing for massive spending cuts, the future of traditional consulting in Washington looks uncertain.

Will DOGE impact the consulting industry? Or Will AI-powered Consultants impact consultants?