AI Impact: How AI Search is Transforming Professional Services and IT Budgets

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Editor’s note: This is AI Impact, Newsweek’s weekly newsletter that explores how business leaders are finding real value through artificial intelligence.

Signal Capture

Signals From the Frontlines of AI Adoption

AI Search Is Breaking the SEO Playbook

Professional services firms have long focused on improving their Google rankings, but the emergence of AI search is changing how visibility is achieved. Scribewise, a marketing and generative engine optimization firm, conducted a survey of 205 U.S.-based professional services marketers and leaders, as shown in their “GEO Readiness Report.” An overwhelming 95% of respondents emphasized the importance of their organization’s content appearing in AI search results.

John Miller, founder and president of Scribewise, highlighted the potential risk, noting that companies may lose potential clients before realizing they were being sought after. He stated that as AI search becomes more prominent, firms that adapt will gain business from those that do not.

Miller pointed out that unlike traditional search, which doesn’t involve a conversation, AI search often prompts multiple inquiries as users work through problems. This change is crucial for professional services, where potential clients may be exploring options for advisers, agencies, law firms, or technology partners before visiting a company’s website.

The survey revealed that searches through AI systems like ChatGPT and Perplexity are already generating leads, with 97% of respondents capturing at least one lead and 67% capturing several.

Core Intelligence: Why IT Services Feel like They’re in a Recession

While enterprise technology budgets are on the rise, that growth isn’t uniformly distributed across the IT services sector. Companies are redirecting funds toward infrastructure, data centers, AI systems, and associated costs. Legacy services must compete for funding against newer, prioritized categories.

Noshir Kaka from McKinsey & Company explained during a Newsweek webinar that standing still in the current environment is not an option. McKinsey’s research indicates that 72% of 690 executives are increasing tech budgets, with most increases between 6% and 8%. However, pressure on older service lines persists, often requiring consolidation of vendors or productivity improvements in existing work.

Kaka provided an example from pharmaceutical manufacturing, where AI can significantly alter processes by predicting outcomes rather than merely improving existing tasks. To remain competitive, technology providers must deliver solutions that demonstrate substantial value through AI integration.

Upcoming Webinars

AI in Finance: From Individual Adoption to Enterprise Transformation

Financial services are wrestling with how to best leverage productivity gains from AI. In an upcoming webinar, Dr. Ranjit Tinaikar will speak with Kevin Buehler of Rogo to explore how AI could reshape financial services.

You can join this live discussion on Thursday, June 18, at 9:30 a.m. Eastern. Registration is free.

Run Log

AI Use Case of the Week

A company’s AI agent can be advanced yet lack context. It often doesn’t know team decisions or where critical updates exist, leading to inefficiencies. Christophe Pasquier, CEO of Slite, identified this issue in daily operations. To address it, Slite developed Super MCP, a tool that improves information retrieval across workplace tools, significantly enhancing AI agent performance.

With Super MCP, retrieval accuracy is above 80%, and response times have improved, illustrating how vital context is for effective AI assistance.

Context Window

Unregulated AI competition between the U.S. and China raises security concerns, proposing a need for AI arms control. [Hoover Institution]
House lawmakers propose a bipartisan AI bill focused on safety, security, and disclosure requirements. [Politico]
The tech industry cites AI as a key reason for over 123,000 job cuts in 2023. [Forbes]
Upcoming AI IPOs will challenge the ability of labs to translate token usage into revenue. [Reuters]
Google DeepMind’s Gemma 4 12B empowers local AI tools on laptops. [Google Developers Blog]
Despite regular AI use, many companies fail to translate saved time into business value. [BCG]

Transfer Protocol

Recent executive movements in AI include:

Bartley Richardson joins CrowdStrike as chief AI officer, leading AI strategy and security outcomes.
Graham Sheldon appointed chief product officer at Docusign, advancing AI in the platform.
Bob Sharp joins Windward as chief maritime intelligence officer, focusing on broader engagement strategies.
Kader Sakkaria takes on the role of Illinois’ first chief AI officer, driving AI strategy in state governance.
Hayley McKelvey named Deloitte UK’s first firmwide chief AI officer to guide AI strategies.

For any executive moves in AI, please send details to [email protected]