AI and the degree monopoly
Four years after ChatGPT caught so many by surprise, the primary role of higher education seems to be slowing down the public’s transition to the AI era. For many faculty, this is a win. For those focused on the future, this is the biggest institutional failure since the Victorian Post Office, with its monopoly on telegraph lines, dismissed the telephone because it had plenty of messenger boys. Adoption was slowed so much there were waiting lists for a home phone line into the 1970s.1
Fortunately, the AI frontier race has skirted higher education almost entirely, so universities can’t slow the models. But higher ed is a monopoly too. Nobody else is granting college degrees. I look around and see that except for a few scattered faculty voices across the country (people I’ve shared platforms with this past year) higher education has decided it’s business as usual, squabbling about athletics and anthropology, worrying about federal takeover when the real risk is technological competition.
Some facts. More than 90 percent of notable AI models released in 2025 came from industry: GPT-5, Gemini 3, Claude Opus 4.5, Grok 4, Llama 4, DeepSeek-V3.2, Qwen 3, Kimi K2. The infrastructure supporting frontier development is also overwhelmingly from industry. Global AI compute capacity has been growing 3.3x annually since 2022, doubling every seven months, driven by hyperscalers and enormous data-center investments. Some universities are entering the compute space. Ten New York universities spent two years and $340 million to get to about 400 GPUs. In 2024, xAI in Memphis stood up 100,000 GPUs in 122 days. In the past two years a site in Abilene, Texas got to 500,000.2
Even in China, DeepSeek, Alibaba, ByteDance, Moonshot and the other model developers are working outside of universities. Chinese universities may be producing more research and talent than U.S. universities because their missions are aligned with national goals. China leads in AI publication volume, citations, and patent output, even though the United States still produces more notable models and higher-impact patents. A Hoover Institution analysis of the 356 researchers appearing on DeepSeek’s foundational papers found that 53.5 percent of those with known affiliations had spent their entire recorded careers at Chinese institutions. Of the DeepSeek researchers who spent part of their careers abroad, over 70 percent ended up back in China. Universities are clearly part of the way China created a domestic frontier-research workforce.
