When Universities Choose AI Over People

California’s top universities are spending millions on ChatGPT while laying off thousands of staff. The timing couldn’t be worse.

The Numbers Don’t Add Up

California State University is spending nearly $17 million on ChatGPT access for students and faculty, even as the system faces a $2.3 billion budget gap. Meanwhile, USC laid off more than 1,000 faculty and staff in Fall 2025 while quietly launching its own ChatGPT partnership. The contrast is stark. Students watch their professors disappear while universities roll out AI tools they never asked for. As twelve USC faculty members wrote in an open letter: “USC has told students it can’t afford to pay the real people they trusted. Instead, it’s buying them a pretty toy.”

The Biggest AI Bet in Education

CSU’s deal covers more than 460,000 students and 63,000 faculty across 23 campuses, making it “the largest implementation of ChatGPT by any single organization or company anywhere in the world.” The system will pay $15 million from July 2025 to June 2026 alone. University leaders frame this as an equity issue. They argue that providing quality AI tools ensures fairness, since some students were already paying for their own ChatGPT subscriptions. But critics see it differently. “For me, it’s frightening,” said Kevin Wehr, a sociology professor at Sacramento State.

Faculty Fight Back

The pushback is real. CSU’s Academic Senate passed a resolution warning that widespread AI use could erode students’ critical thinking and writing skills, encourage plagiarism, and expose both students and instructors to false accusations. They called the $17 million commitment “unsustainable” and criticized it as being “decided without consultation about pedagogical efficacy.” At USC, faculty are equally frustrated. History professor Aro Velmet called the OpenAI partnership an “unthought-through collaboration” that’s untransparent and possibly expensive. “Faculty now have to spend time figuring out what this means for their classes,” he said.

The Human Cost

USC ended fiscal year 2025 with an operating deficit of more than $200 million, up from $158 million the previous year. The university has laid off 1,034 workers in what officials called “punishing” headcount reductions. USC’s Dornsife College alone cut 162 employees, including nearly all academic advisors. These aren’t just numbers. They’re real people who helped students navigate college life, taught classes, and built relationships that AI can’t replace. “It’s a little stressful for everyone right now,” one USC employee told reporters, speaking anonymously for fear of retaliation.

Missing the Point

Universities are solving the wrong problem. As one education expert put it: “Spending almost $17 million on AI tools without a strategic framework is like buying students calculators without teaching them mathematics. The investment is sound; what’s missing is teaching students how to direct these powerful capabilities strategically.” Students need mentors, not chatbots. They need professors who can challenge their thinking, not algorithms that give them answers. The irony is painful: universities are investing in artificial intelligence while cutting the human intelligence that makes education meaningful. Faculty worry that chatbots often generate “hallucinations” or inaccurate information, with many responses spreading racial and gender bias. Maybe the real question isn’t whether students can afford ChatGPT. It’s whether universities can afford to lose their humanity.