New Report Explores Artificial Intelligence and Universities

Mary Meeker, a former Wall Street securities analyst and venture capitalist, rose to fame with her analyst reports about technology companies in the early stages of the Internet. This week, she released her first report in more than four years. It focuses on the relationship between artificial intelligence (AI) and universities.

Ms. Meeker’s annual tech report was a staple of every tech CEO’s required reading as well as many others. Ms. Meeker left Kleiner Perkins to found BOND, a San Francisco venture capital firm.

The narrative below attempts to synthesize the report Ms. Meeker and her BOND co-authors prepared. Ideas in this section are sourced from their report until my Final Thoughts section.

Will Masters of Learning Master New Learnings?

AI is rapidly developing, and the U.S. is the global leader fostered by our entrepreneurial and capitalist system. Of the 17 global companies with a market value greater than $500 Billion, 14 are headquartered in the U.S. The top five most highly valued global public companies are in the American tech sector:

  • Alphabet
  • Amazon
  • Apple
  • Microsoft

Each of these five American tech companies is investing heavily in AI while fighting for leadership in the field, as their core businesses face competition from across the globe.

American colleges and universities have been bastions of technological progress. Ms. Meeker asks if that will be the case with AI since the tech industry has surpassed U.S. universities in AI research spending. Thanks to mobile phones, supercomputers, and information transparency, learning and research methods have changed radically. Today, any learner with Internet access can access a masterclass on any topic.

With the advent of generative AI (ChatGPT, Claude, etc.), Ms. Meeker claims we have reached a generational change across education. AI and connected tech devices provide personalized output that allows users to access information and gain skills on their own time schedule. The ways teachers teach and students learn will change.

It’s not hard to envision Ms. Meeker’s prediction that “the university of the future will not look like the university of today.” She mentions Georgia Tech, MIT, and Arizona State as universities that have expanded their digital footprint to drive economies of scale. AI can be a market share tailwind or headwind as universities look to capture a share of lifelong learners.

AI Will Impact Higher Education Significantly

Internet-based offerings have altered learning and challenged the incumbents over the past 25 years. AI is accelerating a familiar trend. Ms. Meeker notes that:

  • Google is the world’s leading answer engine and is available 24×7.
  • Social media, YouTube, and online courses are increasing learner engagement on their platforms.
  • University online content engagement is rising. Coursera has 140 million global learners.
  • Language learning is optimized through gamification. Duolingo has 100 million monthly active users and nearly $700 million in annualized revenues.
  • Gatekeeping of institutional authority is eroding due to the rapidly accelerating volume and accessibility of information online. Experts can be anywhere.
  • Education and skills can become obsolete in years, shortening half-lives of innovation.
  • Large language models (LLMs) are emerging.
  • AI is being used as a memory aid or enhancer. Students can focus on using information in practice, not via rote memorization.
  • Instruction is available 24/7 thanks to AI tutors available to anyone through the Internet.
  • The concept of career is evolving as younger people can earn ad-hoc income via on-demand service work.

Macro tradeoffs versus higher education in the U.S. are increasing. According to Ms. Meeker, the ones that stand out include:

  • U.S. high school education output is weak to mixed, and global rankings are low.
  • The cost of education post-high school is rising.
  • Student debt levels are increasing and are high.
  • University funding is under pressure due to state and federal government fiscal irresponsibility.

Technology-driven changes may shift winners and losers in higher education. The economics of many universities are under pressure. AI may be the inflection point that makes Clayton Christiansen’s predictions that half of American universities will close come true. University costs continue to rise while the numbers of students decrease.

Innovation-oriented employers are excited about education programs that tie to business ROI. They also favor skills-based hiring. Enrollments in two-year colleges with a vocational focus rose 16% in 2023 vs. a 1% growth in university enrollments.

AI will improve, and models will become better assistants. Changing how students consider educational ROI will impact labor demand. Ms. Meeker cites a Morgan Stanley study that shows how generative AI will impact core job capabilities. The findings are illustrated in the chart below.

chart of GenAI core capabilities per morgan stanley research today vs in three years

Given the rapid technology changes occurring at U.S. corporations, U.S. universities must decide how to optimize for the future. A key differentiator for universities has been creating and maintaining best-in-class programs that attract top young talent.

Universities must find, create, and sustain differentiators that attract students or risk losing market share or, even worse, closing in an AI-enabled world. Younger students are getting smarter about their learning options, costs, and returns. They will vote with their time and money.

Self-motivated students may be the big winners in the AI era. With the advent of natural language queries, all students can become expert searchers and learners. Improvements in AI models will help the best answers rise to the top. The best schools will help students maximize these tech innovations.

The process for many types of teaching will change. Students will have more answers available faster, with a mix of right and wrong answers. Teachers using AI to optimize learning must develop a new art form. Teachers can save time and increase productivity by leveraging AI for more time-intensive tasks.

Time-saving opportunities for learners and teachers will be available through administration, content, and delivery improvements. AI will liberate teachers to focus on ingenuity, the force behind building and producing new things and ideas.

U.S. universities must reaffirm American values and revitalize their own missions. Universities must demonstrate the advantages and opportunities they can offer students and employees. The key for universities will be creating education-as-a-service and generating ROI for student-customers while building best-in-class programs.

Universities must determine their competitive advantages and find ways to gain market share in an increasingly competitive environment. A list of 10 questions university leaders should ask include:

  1. Are you preparing students for the real world while developing their understanding and reasoning?
  2. Are you embracing new methods/thinking methods to improve teaching and learning?
  3. Can you design an organizational structure that incorporates frequent iteration and data-driven self-improvement?
  4. Is your social environment optimized to build lifelong relationships underpinned by deep intellectual and personal common interests?
  5. Are your students receiving an ROI on their core expenditure?
  6. Are your students expanding their perspectives in positive ways?
  7. Are you equipped with the knowledge, tools, personnel, and unique datasets to lead in AI and other cutting-edge research?
  8. Is your institution well-run and well-resourced financially?
  9. Are you collaborating with industry to provide students with real-world experience and understand what needs they are prioritizing?
  10. Are you oriented toward the long term and willing to cannibalize your educational experience to serve students best over the long term?

Universities will need to partner with industry to provide students with AI processing power. Otherwise, the best and brightest students may skip universities and go straight to industry, and their instructors may follow suit.

Meeting the AI Moment Will Enhance Education Outcomes

Ms. Meeker writes that no one can predict how all AI innovation will play out, but the most aggressive change agents are stunned at the current pace of innovation and change. AI creates once-in-a-lifetime opportunities for evolution, creativity, and leadership. We need to focus and minimize our mistakes.

Bringing AI to learning and teaching requires what Sal Khan calls “educated bravery.” The thoughtful use of AI tools may prove exponentially beneficial to students and teachers alike. We should not be paranoid about using these technologies but thoughtfully curious instead.

AI represents an existential challenge and an extraordinary opportunity for higher education. Those institutions that can successfully adapt and harness AI’s potential while maintaining their core strengths and values will be best positioned to thrive in this new era.

Leading the adaptation of AI at many universities will require bold leadership, strategic thinking, and a willingness to fundamentally rethink traditional teaching, learning, and academic research models.

A Few Final Thoughts

In the era of the Internet, few securities analysts understood technology and its influence on consumers better than Mary Meeker. Her annual report about U.S. and global growth in Internet usage, cell phone users, smartphone users, device users, etc., was the topic of many leadership and board meetings in companies with direct or significant indirect exposure to technology.

I read Ms. Meeker’s report several times. Like many of her previous tech reports, it does not contain a specific piece of unknown data that she is announcing to the world. At the same time, the way she organizes the data and supports her points leads to a narrative that may appear new to some.

Several sentences in the report are insightful to me as a retired president of an institution that educated working adults. The first is: “today’s innovation-oriented employers are excited about education programs that tie to strong business ROI and increasingly favor skills-based hiring.” 

It is not easy to find a college attuned to offering programs that provide employers with a strong ROI and equip its graduates with strong skills.

The notion that colleges must “determine their competitive advantages, create best-in-class programs and environments, and find ways to gain share in an increasingly competitive environment” is not new. However, the normal cycle of adapting and modifying degrees every three to five years is too long in the age of rapid change caused by AI.

I shared this report with a few of my higher education colleagues. I asked them if they thought Ms. Meeker’s final statement was achievable: “Leading the adoption of AI at many universities will require bold leadership, strategic thinking, and a willingness to fundamentally rethink traditional models of teaching, learning, and academic research.”

An informal consensus was that bold leadership and strategic thinking were easier to implement than rethinking traditional models of teaching, learning, and academic research. Failing to move away from traditional models of teaching and learning is not tenable in this once-in-a-generation AI era.

Our public school systems (K-12) are often criticized for their slow progress in change. Given their control by state politicians, they could continue. Colleges and universities have federal and state compliance and funding issues but are generally more market-savvy than K-12 institutions.

Ms. Meeker doesn’t write this, but I believe it is implied that some alternative education providers, like Coursera and edX, will respond to employers’ needs quicker than many colleges and universities. How much that shift will impact a sector already under stress is difficult to determine.

Ignoring the workforce changes caused by AI and the AI-related opportunities to build and enhance programs that differentiate your institution from others is a risk that I recommend college leaders avoid.

Ignore it at your own peril.

Subjects of Interest


Higher Education

Independent Schools


Student Persistence