Yesterday we published a story about an AI-powered tax startup that received $10 million in venture capital on top of the $4.5 million they’d already raised to build their vision of a tech-forward option for high net worth clients. This vision includes buying up existing tax practices with revenue of less than $6 million and recruiting (we read that as poaching) top-tier talent.
Someone had this to say about it on Xitter:
One of the big 4 will lean in hard and acquire an AI tax solution. I think its going to be a huge opportunity.
— Dundon (@TedDundon) August 5, 2025
We agree. This was our response:
I bet you’re right. The first couple of these startups to get it right, grow just enough for it to be sustainable, and get out before the bubble pops are going to score bigly. Who knows, maybe the startups will do so well big firms will buy them just to eliminate competition.
Someone else remarked that Big 4 are building their own AI solutions and while true, it’s our belief that they’ll want to absorb smarter, leaner external outfits like the one mentioned above because those businesses are built with a singular goal rather than Big 4’s wide net and scattered priorities. Not to say Big 4 AI solutions will suck (you can say that if you want, we’re going to be a bit kinder), rather that bringing it outside practices will enhance what they’ve already got.
Following that line of thinking, Financial Times just published some comments from former EY UK boss Hywel Ball kind of confirming what we said. Their headline: Big Four face AI competition from smaller firms, says former EY UK boss.
A number of boutique professional services start-ups have an edge by being able to build AI into their work unhampered, he said. “There is a patch in the middle” between being nimble and having “enough critical mass to give you the momentum”, creating opportunities for mid-sized firms, Ball added.
“If you’re really big there are lots of challenges about driving that extent of cultural change,” Ball said. “The Big Four are spending a lot of money on AI, and they’ve got the resources and investment to do it, but they’ll have their own challenges for adoption, because they’re so big.”
Nimble is the perfect word for it. Think of Big 4 as a giant ship and these smaller shops as powerboats. If the motor boat has to stop or turn quickly it can, when Big 4 has to make a quick pivot it’s like that one scene in Titanic (we all saw that, right?).
See you in a couple years when our prediction comes true.
The biggest challenge the Big 4 firms (all of the large firms, really) have always had is their lack of creativity and imagination. Doesn’t bode well for all changes that are rapidly occurring in our economy and society. If these firms were publicly traded, these weaknesses would need to be disclosed in the risk factors section of their SEC filings…
“Our firm is run by a bunch of accountants who have worked here their entire career. Leadership’s lack of creativity and imagination presents a significant risk that the firm will not be able to recognize and adapt to changes in the macro business environment, and missed opportunities and necessary strategy adjustments could cause the firm to crash and burn or slowly die.”