The State of AI & Education

0:00We'll software in some way replace teachers. Parents want better outcomes. What is actually improving retention of information, learning, memory? They're allowing a teacher to be a lot more productive and be ten times better at their job. Will we see more parents like I want more of a truly AI directed education for my kid? It's teachers who are willing to pay and use this in their every single day workflow. We need the text for companies to grow some innovation arms fast. AI is already reshaping the way students study, teachers teach, and creators deliver knowledge. But the bigger question is, are we on the brink of a complete rewrite of how learning works?

0:41On today's episode, we're joined by three A16Z consumer partners, Olivia Moore, Zat Cohen, and Justin Moore, who together bring perspectives on the cultural, technical, and market shifts transforming education. From TikTok's featuring AI -generated celebrity tutors to private schools running full -stack AI curricula, to the surprising way teachers, not students, are driving adoption. This conversation discusses what's real, what's hype, and what the future of learning might look like when it's built natively for AI. Let's get into it.

1:15As a reminder, the content here is for informational purposes only. Should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the company's discussed in this podcast. For more details, including a link to our investments, please see A16Z .com forward slash disclosures.

1:45I'm Justine and this is Olivia and welcome back to this week in Consumer AI. this week we're going to be talking about a very fun trend we've seen recently blowing up all over our social media feeds related to AI and education. And for this topic we wanted to bring on our subject matter expert here at A16Z on education which is our colleague Zach. Zach you want to give a little introduction and talk about your experience in Ed Tech? Yeah I would love to I think it's fun to feel invited to a podcast from colleagues. It's interesting feeling for sure. Yeah, so quickly just my background, been operating, investing in education for quite some time.

2:24So I've been here for a little over two and a half years thinking about what the next generation of education is going to look like with the advent of AI. And then before this was at General Atlantic, with one of my covergers on the consumer internet group, being education, we were investors in Quizlet, Duolingo. We did the chest .com deal while I was there. So the entertainment kind of consumerization of education. And then before that, I actually built and sold an education technology company that was focused on delivering high school computer science education. And most of the Northeast area, we sold that to actually an education focused roll -up.

2:55You can count how many times I've said education, where I worked for a couple years as well, rolling up different assets in mostly adult education and corporate training. And I know we have looked at a lot in edtech over the past two years especially. I think everyone has this intuitive sense that people are using AI for homework, but even I was surprised like seeing some of the data for probably the full first year of chat GBT, like the .edu users were even larger than everyone else who was a non -student user, which is pretty crazy. And it does feel like the backlash was also as severe and as immediate, like all of the anti -AI checkers.

3:31Are schools still anti -AI? Like how was that evolved? Yeah, it's a good question. We had like AI wave, then AI detectors and the rock and sock and moors of education. and you have the LA and your city public schools banning AI right away. I think we're super far away from that moment, which I think is really, really strong. Now, I think we're in different layers of far away, depending on where you are in education. So if you look at K -12, there's still some skeptics. There's still, I would say, like, predominantly, I think 80 % of districts now have a generative AI team that's going after and looking at procuring kind of new technologies.

4:08So not only is there, like, near -marked budget there are people who are thinking and proactively looking for it. There's still friction around what you want to use it for and how you want to use it. Maybe there should be a teacher in the loop that has more understanding of how students are using the AI. Maybe that's a good or bad thing, but I think it's a good thing, kind of net net that there will be more AI in the classroom. Then higher ed, you have cloud releasing cloud for education, you have open AI releasing kind of education platform. They're partnering and piloting with a bunch of universities.

4:39And this is like a pretty horizontal platform that will be like fundamental to teachers and students' experiences. So I think HiRet is leading the pack. I think they're realizing that this is going to be a tool that people are going to need to know how to use in their jobs and their everyday lives. So I've been pleasantly surprised. I know 18 months does feel like a long time, but in education it's not. Yeah. We've taken five, six years to move to cloud, and most people aren't even there yet in the education world. So I think it's super impressive and there's some schools that are like mandatory I usage like in the curriculum.

5:11I think Ohio State is one of them. So I think it will continue to trickle down I think people are always a bit more careful and wary about technology with the younger ages But yeah, I think we've passed the kind of hysteria moment are now in kind of the pragmatic moment Which is exciting especially for founders building a space? Totally for sure. Yeah, and I think you sort of alluded to this when talking about your experience in edtech But one of the things that's so both interesting and scary about the education market as more outsiders is like It's not just one industry, right? There's Public schools there's private schools.

5:44There's charter schools. There's homeschooling There's supplementary products that parents buy for their kids Then there's the whole higher ed public and private industry and then there's like adult education kind of future learning Reskilling all of those sorts of things which I would imagine is probably going to be huge in the age of AI by automating many jobs and or enhancing many jobs. I'm curious, have you seen the most adoption among a segment of that market? Like parents just buying standalone products for their kids versus school districts? I'm still really surprised that this is my answer, which is teachers.

6:19It's not actually students, it's teachers who are willing to pay and use this in their every single day workflow. I've seen a lot of adoption at students who are trying to use this for home recalpers, but they're churning off or using it which has a way to get their problem set done and then go back to kind of hanging out. And adult learners, like the retention maybe has been a bit better, or like the completion rates or learning efficacy on duelingo has improved with all the AI features, but I have not seen a native AI player in the adult education space. And maybe that's just because distribution's really hard and layering on AI to existing strong pedagogy is maybe the right way to do it, or it seems like that is the case now.

6:56But with teachers, like the rapid amount of adoption is so high, and that's a lot of it is because like 90 % of the job that they hate is the administrative part, which is grading, feedback, going home, building new assignments, new curriculum. A lot of them have just been barring curriculum year over year. They've been trying to iterate on one unit at a time, and now they can generate a curriculum per student. And I think that's extremely exciting. I think we hopefully will take it farther and it won't be generating assets that we've already seen in education, like worksheet, it's for multiple choice questions.

7:28And like the units will start to become more of an AI experience. But for now, it's been teachers the way I think Magic School has over like five million users, I think 50 % of US teachers has used their tool. Most of the most mature AI companies from a revenue standpoint have been selling to teachers bottoms up, which is tremendous. Teachers have a very small wall to spend on tools. And this is just an outsized return for them compared to the 15 or 20 bucks a month that they're spending on it. This brings up another point when you think about what's driving student outcomes, which which is like, there's a couple of ways to look at what is working in AI and ATEC and one would be like, what is getting the most usage, which to your point is probably still chat GPT for the end students versus like maybe more focused products.

8:10And then there's what is actually improving retention of information, learning, memory, things like that. Have you seen anything that you've been really impressed by in terms of what's working in AI and ATEC? Yeah. I think the core of the question is the question, which is like, what is working, which is like what does working mean? There's the investor side of what it's working, which is like what do you want to see when you're investing in a company, right? Which is different than like the learning outcomes side. I think from the investing side, I care a lot about looking at kind of retention and engagement.

8:41Retention obviously because you have summer months, but you also have students who come on with a test that they have in two days. And as the experience good enough that they capture them to work proactively on the app the next time. So we look at metrics such as cohorted engagement to see how students are performing things like that or monthly retention less So like the weekly or yearly retention which I think could be kind of a red herring in this market So I love looking at how many days in a week as a user using this on a cohort basis as the company grows Is this starting to become part of their learning and I think that that is also a good proxy for how good the product is not just how Engaging it is because if a student is doing this to just get their homework done I don't think you're going to see that level of engagement.

9:21You're going to see it taper off around certain times, certain months, or it'll be a little spike year. But people who are seeing flattening engagement of a number of days per week, hopefully, you know, about four or five, given the school week, I think it's exciting. On the education side of what's working, this is a really, really hard question. I think it's probably, perveter, like a lot of different markets are kind of suffering from this, which is like, what is the benchmark and e -vail function in education, right? So luckily education like it's not like a corporate job where it's like oh you have a ambiguous performance review and maybe you're doing 10 % better There is like tests at the end of the year that measure students performance The problem with that is you need multiple years of student testing because there's a bunch of variables there So one is like how do you figure out like what's a conditional what's independent?

10:07What's dependent all of that stuff in terms of like what's working in the school? But on top of that AI is still at the periphery of education, right? So since it's the perfect education, we don't actually know what the outside's impact is. It's helping teachers create assignments better. It's helping students get homework done, but it's not like core to the schooling system. So I think it's really hard to know learning outcomes. I think it has to be a mix between the metrics of the product and how good an understanding the founder is of how to build pedagogy and learning methods within the product.

10:37But I think we're still a couple years away from actually understanding what the learning goals are. There's some papers that have come out from various schools and universities. I've shown like test improvements with an AI -instructed core or so things like that, which is exciting, but again, these are research papers and case studies. These aren't like kind of like full state or full nationwide studies. Okay, so to get back to the point about making AI core to the educational experience that kind of touches on one of the sort of viral social media accounts we've been seeing. And I'm sure anyone in the education space definitely use that, has been seeing.

11:10I think it's literally called the future of education. It's an Instagram account. It's run by this woman. and I think her name's Mackenzie Price. And she went to school called Alpha School, which I believe is a charter school in a few states now, and has had these viral Instagram videos blow up by showing how her school, they have two hours of classwork, I believe it is a day, and it's delivered via AI tutors, like these computer programs that are teaching kids at their level, and then they spend the rest of the day on sort of self -directed projects or things like that. Would love to know your take because the education expert, Zach, what you've heard about Alpha School or will it work to deploy AI like that?

11:49Yeah, Alpha School is like everything I can ask for about what's happening in education. We talk about it, we all pine on it, and then we have to just sit here and wait for superintendents and district heads to buy single point solutions in AI every turn of the budget. And then over three to four years, we can have an narrative. I think what Alpha School brings us is what any labs team would be able to bring at a company, right? So it's like, hey, you know, that SNAP Lab's team is going to try out a bunch of new features and they could deprecate whatever features because they're moving fast and not deploying a bunch of resources and they have outside's budget to go do this.

12:23Then let's see what works and what works we're going to take and what it doesn't work. We're going to deprecate and we're going to continue to iterate. I think Alpha School is doing that for private schools now and hopefully for public schools later, which is a tuition is, you know, $40 ,000 or super well -funded private school, the parent and student base is self -selecting into a group who wants technology in the classroom. These might seem like just small facts, but like all of these in an algorithmation change like the outcome of what something like a school can do and removes a bunch of friction to allow you to move fast.

12:52So I think what Alpha School is showing us is if you try to turn full tilt on AI and education and you bring it into the classroom and you're fine over spending on software, you're fine spending a bunch of money, testing a bunch of different software, you can figure out what's working. I think my takeaway here is this is a great signal for where technology is today that if you have the privilege to go test that and figure it out It will have outsized impact I think they rank like 99th percentile and a few different assessments Their students are now like top one top two percent of nation like it is incredible outcomes But again, this is like the lack of commercialization of a lot of this software Part of that is what is the integration look like part of that is just a cost of software part of that is like the software literacy at the school level.

13:35So I think Alpha School is net net extremely positive signals. I think it's an incredible way to learn. It's leaning into a lot of the old ways that we talked about learning, which is like self discovery, self learning, very limited instruction. And it's working. So I think public schools are looking at it. Maybe superintendents are saying, well, I don't have hundreds of thousand dollars of a software budget. But I think that's okay, right? Like we see software gets cheaper, or let the Alpha Schools overall test out what's really working and those companies will really benefit from early partnerships from Alpha School.

14:04And to me, it's like paving away for a lot of companies to see what they're doing. Obviously, from a very privileged standpoint, where Alpha School is. Interesting. Yeah. I think the controversial question there, like when you talk about superintendents don't have hundreds of thousands of dollars to spend on software every year. They do spend that on teachers. And so the controversial thing is, we'll software in some way replace teachers. will AI replace teachers or will we still need a human instructor to be delivering the curriculum or giving lessons to the majority of students? I think no or very long horizon away.

14:37There's still a shortage. There's still teachers who are swamped with work. Well, we're talking about it in the AI world for what consumers can do with AI and what even enterprises are doing with AI. Like, we are multiple years behind there. Like, the biggest use case of AI right now is generating an answer sheet or a worksheet she assignment. It's not even like a unit in a classroom. And what I mean by that is like, it's actually a really big nuance difference. And one of the reasons why I've had a little bit of a hard time investing in these early education companies is they're allowing a teacher to be a lot more productive and be 10 times better at their job, feel like burnout is a lot lower, incredible, right?

15:15Really, really amazing. But it doesn't mean that the students are interacting with AI in a learning environment. They're actually interacting with the same asset that they would and they're having the exact same experience. Maybe they're having updated worksheets. Maybe there's some like better memes or better references in those worksheets because the teachers could update it weekly. But that's very different than being in an AI -enabled environment where you can take a history lesson straight from a Blinkins avatar and speak to them and have a detailed conversation or create your own world around what you think.

15:44You write a creative writing prompt and go create your own world around it or create a game around it. I think those experiences are far away from coming. So I think my point here is not to not answer the question, but as I say, we're so far away from even like AI teaching units I think we're very far away from AI teachers now I think what will happen is like the amount of active teaching will go away Because I think you can like have really good active teaching with AI But I don't think it's going to fully replace a human teacher. Yeah, super interesting I do feel like on the opposite end of the spectrum from alpha school, which is like very private very high cost is this explosion of like free, publicly available.

16:20What I would call a tech content, but it looks very different from the prior best in class, which was like the Khan Academy videos that I learned math and other things on and that I love. It's like open source animation package is called Madam. It's so around today. Yeah. It's and now we have like people putting their textbook into notebook. I am and making a podcast. You found a bunch of talk videos that generate like Sydney, sweetie explaining this. Yeah, there's this Instagram account called OnLock Learning. Okay. Yeah. And every video they post gets millions of views. And it's like explanations delivered by like deep fake AI celebrities of like math and physics content.

16:57I think particularly for the AP or IB exams. Yeah. And it also has like diagrams and graphics that sort of walk you through the explanation. Yeah. And I guess it just makes me think to what extent are we're gonna see standalone AI edtech products versus just new formats and ways to learn that are delivered across all of the platforms that we already have. Yeah, I think it's a great question. And I've watched way more educational videos than I have in the last like four days than I've had in the last 10 years. Which again, it's like a really good signal that like they're engaging, they feel like brainwrought content, but they're actually the complete opposite.

17:35Yes. So they like look, feel, sound are cut the same way. But they're teaching a really, really, really, really detailed topic and pretty technical topic. And like they're getting better. Like I remember a year ago, it was like Taylor Swift teaching the Taylor series. It's a tool we use in math to turn scary functions into friendly polynomials. Yeah. And now you have like a Drake in conversation with Sydney Swini. So if we square root it, we get the vectors length. And that guys and gals is why this expression gives you the length of a 3D vector. Yeah. Talking about three -dimensional shapes, it is like getting better both on like the animations of the graphics side and then also the deep -faces of celebrity side like it's all getting a lot more engaging.

18:18What I think is really interesting here and the thing to focus on was I don't know if you remember as a kid you were like, oh like, Zax of Visual Learner or like Justine likes audio. Yeah. Olivia likes to read and like marinate with her ideas. And then you kind of get box into like a type of learner. And that was considered like pretty progressive education. It's like, oh, we know what type of learner you are. And we're going to like cater to it. The problem is I'm a visual learner for one thing, but I might want to listen to a podcast for another and read for another or watch a brain rot radio for it.

18:48Like it just could be so many different things. Or to do 100 problem sets, right? So I think what's happening now is like we're going to have like a a factaining of a bunch of different types of learners, where depending on the topic and your understanding of the topic, you could pick whatever modality you want. And I think that's really, really exciting. And then also depending on how serious you want to get in the topic, like if you want to just be conversational around it and it's not for a test, then maybe brain rock content is perfect. But if you are taking like an exam that matters for your final grade, like maybe you want to generate a bunch of problem sets and then listen to audio that explains your answers, right?

19:22So I think for me, it's more, I don't know if any of these turned into individual companies, but I think what's really exciting here is the mode of learning is going to be the title of what mode of learning you are and what mode of learning, like you're going to be like burdened. It's going to be removed from that burden. And I think that to me, that is the most exciting aspect for education right now. And I think we're seeing it. Engage when these videos are insane. And this is not a brain rot video. This is not Italian brain rot. Like this is very, very different. Yeah, well, even the, it's exciting.

19:53Even the VO3 vlogs where it's like a day in the life of some famous historical figure. History stuff is incredible. It's fascinating. It's like truly entertaining to watch. And I find myself like actually learning things. I think the hard part of that is there's a few different companies that are doing really interesting things at the forefront of AI and education. Yeah. One of it feels like what the VO3 thing is doing, which you can chat and have a conversation with Napoleon about history, right? Things like that. But in order to get school adoption, they have to wedge in with these kind of like more rudimentary tools, which is like the worksheet generators and like student helpers and feedback.

20:28And then once you do that, it's not so easy to get people to use the other mode because it's a new form of education versus, hey, do the same thing, just do a times times better. So it's interesting to see like the stuff that engages us the most and gets me the most excited. Even if it's being adopted and paid for by the school, if you look at the usage of those tools, compare the usage of kind of the more rudimentary tools, it's extremely low. So I think there's probably going to have to be like a large like PD movement here on like how to bring AI not just into your workflow but into your classroom.

20:58And I think that's a really big difference. Yeah. It's fascinating to think too about if you were to design the school system from the ground up starting in the AI world, like how it would be different. One of the things that has really interested me about the brain videos is like for the first time it feels like it's separating like what the content is and who is delivering the content and then it's optimizing both of those. So if you look at the comments on these videos, I'm sure we'll show some of them. It's often people who are like I was like a physics graduate student and I got like a 4 .0 at this prestigious program and I'm like telling you guys this is like an exceptional explanation and I've never understood this content better.

21:37So like you're optimizing for like, hey, this is how you deliver the content in a good way, explain it in a good way, make it understandable. And then like, here's the like brain rot celebrity, like this is a familiar voice. Some voice surfers video on top. Yeah. Exactly. Exactly. This is interesting graphic or image to like bring those things together. Yeah. Which we've pretty much I think only seen with the self -directed AI products today, because the traditional schools you can't really separate the content from the teachers is my understanding. Yeah, it's interesting. I think the answer is in my head is probably like the textbook company's control this dynamic here a lot.

22:12They are still the gatekeepers of a lot of content and what gets in and out of the classroom. Now, I think it depends on whether they run with this or not. I think sometimes they view this as cannibalizing their existing business. Sometimes they are like, oh, this is extending our existing content and we have the single source of truth and AI is really good at augmenting, but not net new creation. So I think what's going to happen is really dependent on where the textbook companies and the publishers spend the next kind of 18 months taking about net new products. Are they going to partner with AI companies and the AI companies will get distribution, the textbook companies will get really strong product and technology, extension of their existing content that feels like it's slowly losing its value day by day.

22:53So it's a weird kind of power dynamic right now, but I think that that's where we are. Yeah, we need the textbook companies to grow some innovation arms fast or outsource them. Yeah, on one side of the spectrum, which is this is how the educational system actually works and it's like very complicated and in some way that's like the healthcare system or the tax system where there's a bunch of annoying outdated stuff, but you can't really change it. And then I'm on the other end of the spectrum where I'm like blow it all up and have everyone be taught by an AI tutor like all of the time, like if LLMs have ingested the whole internet, they've probably learned a lot of stuff.