Microsoft, OpenAI invest $23M in teachers’ union amid education cuts

Microsoft, OpenAI, and Anthropic have collectively invested $23 million into the American Federation of Teachers (AFT), the second-largest teachers’ union in the US, to establish an AI training center for educators. This unprecedented funding from major AI companies comes as the education sector faces severe budget constraints, with the Trump administration cutting nearly $7 billion in public school funding while simultaneously threatening to dismantle the Department of Education entirely.

The big picture: Tech companies are strategically positioning themselves within cash-strapped educational institutions, creating long-term dependencies while the sector struggles with funding cuts and political uncertainty.

Key details: The National Academy for AI Instruction will be based in New York City and serve the AFT’s 1.8 million members.

• Microsoft is providing the largest contribution at $12.5 million over two years.
• OpenAI is contributing $10 million in funding and technical resources.
• Anthropic is adding $500,000 for the first year.
• The center aims to teach educators “how to use AI wisely, safely and ethically,” according to AFT president Randi Wengarten.

Why this matters: The investment represents a calculated effort by AI companies to normalize their technology in education despite mounting concerns about its impact on learning and cognition.

• Recent research from Microsoft and Carnegie Mellon University found that excessive AI chatbot use correlates with declining grades, memory loss, and reduced critical thinking skills—a phenomenon called “cognitive offloading.”
• AI models frequently hallucinate or fabricate factual claims, creating accuracy concerns in educational settings.
• Students are increasingly submitting AI-generated assignments with minimal effort, frustrating educators.

What they’re saying: Industry leaders acknowledge the risks while pushing forward with integration efforts.

• “I do think that there is a risk,” Brad Smith, Microsoft’s president, told the New York Times. “The lesson of social media is don’t dismiss problems or concerns.”
• “It will be a place where tech developers and educators can talk with each other, not past each other,” Wengarten said about the training center.
• Trevor Griffey, a UCLA labor studies lecturer, characterized the funding as “a long-game investment by companies to turn young people into consumers who identify with a particular brand.”

Broader context: This funding follows a pattern of tech companies embedding themselves in educational institutions.

• Duke University recently partnered with OpenAI to provide unlimited ChatGPT access and developed its own “DukeGPT” tool.
• Ohio State University announced mandatory “AI fluency” courses for all students starting fall 2024.
• The timing coincides with the Trump administration’s education budget cuts, leaving schools particularly vulnerable to corporate influence.