California’s Elite Universities Invest $17M in ChatGPT and AI for Students

Leading universities throughout California are investing heavily in artificial intelligence platforms, such as ChatGPT, for their students, even while making cuts to faculty positions. This trend has raised significant concerns among educators and parents alike.

The University of Southern California (USC), a distinguished private research institution, recently allocated $3.1 million to partner with OpenAI, granting access to ChatGPT for 80,000 individuals, comprising students, faculty, and staff.

However, faculty members at USC, where tuition reaches nearly $80,000 annually, have expressed unease about these financial choices, especially considering that about 900 employees were laid off as part of efforts to address a $200 million deficit, as reported by HigherED Dive in November.

In an open letter to The Daily Trojan, a dozen faculty members voiced their frustration, stating, “USC has informed students that it cannot afford to compensate the trusted individuals. Instead, it’s investing in a superficial tool.”

“What kind of human dignity does this conduct uphold? What kind of trust does it foster?”

Andrew T. Guzman, provost and senior vice president for academic affairs at USC, defended the investment. He stated, “This encompasses all user subscriptions and advanced credits for in-depth research on the platform, while also ensuring data privacy, a benefit not offered by individual subscriptions.”

USC is not alone in its substantial spending on emerging technologies.

California State University (CSU) has implemented the AI tool for nearly half a million students and faculty, at a cost of $17 million. Some institutions in the University of California system, including UC Berkeley and UC Irvine, are also providing access to students.

However, critics are questioning the role of AI in higher education, warning that its prevalence could impede genuine learning and pointing out the significant costs associated with these tools, especially during staff layoffs.

Lee Codding, a parent with a child at San Diego State University, remarked, “This contradicts the principles of higher education. We’ve rushed into this decision, and I don’t believe it’s wise.”

Codding acknowledged the importance of integrating AI tools but cautioned that having a pro account — which performs tasks at higher levels than free versions — could stifle critical thinking skills. He added, “They may see this as a proactive measure to exert control, but I think that’s misguided. I would prefer they take a more measured approach than advancing recklessly.”

“That’s a hefty sum,” he continued. “I’d prefer to see those funds directed toward hiring more faculty members.”

Critics like Codding find it especially troubling that while Cal State grapples with a $2.3 billion budget deficit, it is still dedicating millions to AI technology. CSU’s budget included $1.9 million for ChatGPT Edu, the university-specific version of the chatbot, initially available to 40,000 users. The system later expanded its contract by an additional $15 million to cover approximately 500,000 users through July 2026, according to reports.

Codding asserted, “Providing individual AI accounts may be excessive. I appreciate technology, but utilizing public funds to support private enterprises raises concerns.”

Another parent, Saba Haseeb, who has three children attending USC, UC Berkeley, and UCLA, echoed the sentiment regarding the extravagant expenditure on AI tools. “I wouldn’t endorse spending millions on these technologies. It seems misplaced.”

Haseeb emphasized that public universities should prioritize funding human resources over solely investing in artificial intelligence. “If they’re replacing faculty members with AI systems, it may warrant a reevaluation of tuition, as a large portion goes to faculty salaries,” she asserted.

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With experience raising children in diverse professional fields, including medicine and law, Haseeb believes universities should be more transparent about how new technologies are funded and employed.

“It would be beneficial if they informed the public that a portion of funding is allocated for AI investments like ChatGPT,” she suggested. “Parents ought to be more involved, or at least aware, of how these technologies will be utilized and implemented.”

In response to inquiries from The Post, UC Berkeley did not divulge the specific costs associated with its AI tools.

A spokesperson stated, “AI tools are part of subscriptions already licensed.” They noted that the Google Gemini app and Zoom AI Companion are accessible through UC’s agreements with those platforms, benefiting all 46,151 students.