The California State University system has committed millions in public funds to OpenAI through a no-bid contract, even as majorities of its students and faculty express skepticism about artificial intelligence's educational benefits and voice significant concerns over its impact on job security, creativity, and the environment. The CSU system renewed its contract for ChatGPT Edu with OpenAI for $13 million annually for the next three years, following an initial $17 million no-bid agreement made one year and three months ago.
An internal CSU planning document, obtained by NPR one year and five months ago, described the potential partnership with OpenAI as "a huge branding opp[ortunity]." A separate document from 2025 advised officials to explain the no-bid contract by stating the deal is "essential for the success of the CSU's AI strategy" and that OpenAI was "uniquely positioned to meet our needs." Ed Clark, chief information officer for the CSU's office of the chancellor, stated the system chose OpenAI as the "most cost-effective option" to bring AI tools to over half a million students, faculty, and staff.
Corporate Profits, Public Funds
This multi-million dollar commitment to a private technology corporation comes as the CSU system faces budget cuts, according to Zach Justus, a communications professor at California State University, Chico. The contract ensures that a private entity, OpenAI, extracts significant public funds from an institution serving approximately 470,000 students, nearly half of whom are Hispanic, over a quarter are first-generation college attendees, and many work while attending school. Leah Belsky, vice president of education at OpenAI, stated the company shares a responsibility to "help students use these tools well… to harness their full potential and succeed in the AI-driven future of work."
Despite the CSU's financial commitment, a survey conducted last fall across all 22 campuses, with over 94,000 respondents, revealed widespread ambivalence. Roughly 65% of students and 59% of faculty said they were skeptical AI was benefiting education overall. Large majorities also worried about AI's impact on creativity (83% of students, 82% of faculty), job security (82% of students, 78% of faculty), and the environment (80% of students, 84% of faculty).
The Cost to Labor and Learning
Students and faculty voiced direct concerns about the implications of integrating AI into education. Martha Kenney, a professor at San Francisco State University, argued that offering a chatbot allowing students to take shortcuts on assignments is "cheating our students out of an education." Kenney co-authored a petition urging the CSU not to renew its contract with ChatGPT Edu, stating that "refusing this technology needs to be a position that's on the table" due to generative AI's environmental impact and its reliance on copyrighted work without compensation. Sejal Daterao, a graduate student, expressed gratitude for the CSU providing access to premium AI features she could not afford but also frustration with false information generated by chatbots and tech companies' use of creative work without credit or compensation.
H, a fourth-year computer science student at San José State University, described initially avoiding AI due to classmates using it to write assignments. She later found herself using it as a "crutch" rather than for learning foundational skills, leading her to stop. H also expressed disappointment that the CSU "accepted it with open arms immediately" and worried about the environmental impacts of data centers.
Managing Dissent, Preserving the System
CSU Chancellor Mildred García, during a February 2025 press conference, positioned the partnership as unprecedented in scale. Ed Clark dismissed the online petition against the contract, claiming it "does not reflect overall sentiment from within our community" and citing a survey showing "strong support" for AI. However, the same survey revealed that 52% of faculty reported a negative effect of AI on their teaching, research, and administrative experience, despite 56% reporting a positive effect in a separate question. Clark also stated that the CSU's generative AI advisory committee, composed of students, faculty, and staff, "unanimously recommended renewing the contract."
Jennifer Trainor, an English professor at San Francisco State University, described a "groundswelling of resistance" among students who are "ethically opposed to the environmental impacts and the bias and the erasure of their jobs and voices and creativity." While some faculty, like Trainor, adapt by teaching AI ethics and requiring hand-drafting, and others, like Justus, encourage experimentation to prevent AI misuse, the system's overall strategy, as articulated by Clark, is to prepare students for an "AI-driven future of work," framing AI literacy as "part of career readiness." Justus also acknowledged that if the system did not provide these tools, it would be "systematically advantaging students with more financial resources."