AI, Adtalem, and Budget Cuts
AI dominates ASU-GSV, Adtalem stock defies gravity, and schools are broke.
The AI Takeover
Michael and I have FOMO from missing out on ASU-GSV this week, where AI is taking center stage. There are 393 sessions dedicated to AI. One would almost forget that there’s anything else involved in education! Math, for example, only gets mentioned 15 times–and, you guessed it, each time was within the context of AI.
“Teacher” is mentioned in 120 session descriptions. “Student” in 274 sessions. Maybe we’re just mad because we couldn’t get our companies to comp our flights, but it kind of sounds like we’re forgetting that AI is a tool to achieve something for learners, and mistaking it for the something.
We understand that AI is the fourth industrial revolution, but I think we are losing sight of what the revolution is for.
Crime Pays
If we were at ASU-GSV, we'd be particularly excited for Adtalem and McKinsey’s panel, “Can AI and Humans Be Friends?” Adtalem, for those of you new to our trash-talking, is the perennially sued for-profit owner of Devry, which Fahmi Quadir is short selling.
In a world where education budgets are getting cut, when university leaders are getting pilloried, heck–when the rest of the stock market bleeds from tariffs (and down 13.5% YTD)–Adtalem stock is up 6% YTD, and up 97% over the past 12 months.
Absent a recent earnings report, we have to conclude that it’s because the regulatory environment is just so damn sweet for predatory for profits. Given the state of current affairs in this country (aka, the weird pardoning of crimes like Trevor Milton and Carlos Watson and the end of the Consumer Finance Protection Bureau), we’re not optimistic about Ms. Quadir’s short position, much as we philosophically are aligned with burying Adtalem. Be sure to catch them at ASU-GSV, though!
Budget Cuts Sweep the Nation
The detonation of the federal Department of Education is affecting local educational agencies’ budgets across the country. In an effort to return more funding to the states, the Trump administration has done the reverse.
Throw a dart at an LEA and they’ll tell you that there isn’t any near-term replacement for the funding that they’ve lost. Wisconsin is going to lose 8% of their total budget, with Milwaukee expecting a 20% decline in revenue. Massachusetts Governor Healey said districts across the state would lose $106M. Michigan school districts are crying foul after the federal government abruptly cut off $42M in funding to the state.
The cuts even reached the tony schools of Greenwich, Connecticut, where $4M was just cut from the district budget. The school board meeting this past week was a presage of things to come. Basically, lots of angry parents yelling, and some protest guitar strumming.
If we are trying to send more money back to LEAs and school districts, we’re picking an odd way of doing it. We need more money for our learners! We need more money for Special Education, and school lunches! And music teachers who can show our kids how to play protest songs! Instead, these kids are going to go to poorly funded schools, go to crappy for-profits run by Adtalem, and get crowded out of the workforce by AI co-pilots.