The use of AI in edtech products and services is now an expectation, rather than bonus, for venture capitalists looking to invest in new companies, according to funders.
Speaking at a virtual conference organised by Edtech Insiders, representatives from private equity firms discussed how the emergence of AI and sophisticated language learning models like ChatGPT has impacted the current edtech landscape.
Katelyn Donnelly, founder and managing director of Avalanche VC, said AI “needs to be embedded in every product that is going to be successful”.
“We expect that any technology based business model will have an AI component to drive efficiency or effectiveness of that product.”
Amit Patel, managing director at edtech fund Owl Ventures, agreed, adding, “It’s been really remarkable to see how quickly companies have incorporated AI into what they’re doing, both customer-facing and internally.
“It’s got to the point where I can’t even think of a company in our portfolio that doesn’t have something related to AI that they’re leveraging and so it has really become a part of the fabric of what every company’s doing very, very quickly.”
At the same event, the founder of Minerva University called for a “shift” in the concept of education given developments in AI.
Ben Nelson, the entrepreneur behind the virtual university, argued that current education provision is too focused on recalling and analysing information within a particular context – something that AI can often do better than humans.
“Much of what we spend that money on is not effective”
“We spend a little over $2 trillion a year as humanity in educating our citizens or fellow humans in a post-secondary educational environment,” he said.
“Much of what we spend that money on is not effective.”
Nelson pointed to studies showing that students will “overwhelmingly” fail a final exam given to them again six months after they initially passed. He added that AI is often able to pass standardised exams and is only going to improve.
“We’re effectively spending trillions of dollars a year getting human beings to be worse at something that the technology is already good at,” he said.
He instead called for a focus on being able to apply knowledge broadly to unknown situations, something he said large language models will struggle to do.
Minerva University offers an interdisciplinary program that focuses on developing creative and critical thinking and effective communication.
“It’s not that the imperative didn’t exist before, it’s just that AI exposes the urgent need to do it now,” he added.
