Canceling that ChatGPT contract does not solve the AI problem; it might make it worse

Ever since February 2025 when California State University entered into a $17 million contract with OpenAI, the makers of ChatGPT, there has been criticism inside and outside the CSU system that the higher ed institution was making a mistake. Some of that critique is on point, but much of it is misguided. 

The critiques of this move have been loud, with one American Association of University Professors article lamenting “Cal State faculty are furious about the ChatGPT rollout.” They argue that the deal arrived as the AI tsunami hit academia and widespread disruption to teaching and learning — authorship blurred, student work harder to distinguish from AI output, traditional assessments undermined. With new avenues for AI-assisted cheating, long-standing assumptions about how learning is demonstrated were shifting faster than faculty and institutions could adapt. There’s no question — AI, writ large, has upended higher ed. 

Then there’s the optics of the deal. CSU received some positive attention nationwide as one of the leaders in creatively thinking about what AI means in higher education by engaging with the world’s biggest AI company. However, the deal also came at an inopportune time. When it was announced, the system was in a budgetary crisis, and some campuses were laying off workers. 

For context: In February 2025, the CSU system signed a deal with OpenAI to provide ChatGPT edu — an education-focused version of ChatGPT — to all 500,000 students and 60,000 employees for 18 months. The deal is set to expire in July 2026. With calls to cancel the deal, or at least not extend it, now is the time to ask whether the deal was worth it and how future deals could be done differently.

Canceling the contract would create fragmentation, not stability, pushing the system back into an ethical Wild West of AI, where expectations around appropriate use are unclear and unevenly enforced.

Critics of the contract get some important things correct: For one, they are right to question the decision-making process that led to the quick signing of the deal and the rapid rollout of ChatGPT across the system. Cal State professors who criticized the contract explain that there was little consultation, and “except for two professors and one student,” as the American Association of University Professors article claimed, there was limited discussion with the broad CSU community. 

Let’s be clear, ending the CSU’s ChatGPT Edu contract would not address AI’s harms. Canceling would not change whether artificial intelligence shapes student work. The contract and the technology are often conflated. For example, the widely circulated petition lists the harms that have come to education like “diminish(ing) the quality of teaching and learning.” There are legitimate concerns about the integrity of college degrees, but none of those are alleviated by ending this relationship.

We’ve identified three potential consequences if the contract is canceled and no new deal is signed for a secure and free-to-users large language model. 

1. Student equity: Equity gaps will get worse as students are split between those who can afford top tier AI models and those who are using free tools that come with severe limitations. 
2. Teaching: Imagine a world where some students pay for premium ChatGPT, others pay for Claude, some use free versions, and some do not know how to access any models. This makes teaching with AI more difficult and working around it just as difficult as ever.   
3. Privacy and security: This is a big one. Without a customized and secure product like ChatGPT Edu, students, faculty, staff and administrators will have less secure data and privacy. This has huge implications for sensitive personal data, intellectual property and the crown jewels of university data. 

The bottom line? Canceling the contract would create fragmentation, not stability, pushing the system back into an ethical Wild West of AI, where expectations around appropriate use are unclear and unevenly enforced. We have made progress in policies and shared understanding in the CSU that could be rolled back quickly. This would have ripple effects on faculty workload, collegiality and campus culture.

The real tradeoff is not between AI and no AI. It is between structured, institutional engagement versus unequal, unregulated, individual use.

Some people will always dislike and distrust AI for political and ethical reasons. However, we believe that the debate at CSU and other higher education institutions isn’t really about AI. Rather, the contract with Open AI touches on long-standing questions at CSU — shared governance versus administrative speed, labor versus tech investment, and the biggest question of all — what is the purpose of university education. 

When it comes to AI, CSU and all higher education need a constructive path forward. Tech companies like to say they “move fast and break things.” Academic institutions need to find ways to move fast and fix things — experiment, fix, iterate, solve problems and rethink decision-making processes. Even at cash-strapped institutions such as CSU, this is possible because the constraints are often about how decisions are made rather than budgetary. For instance, curriculum changes can be contentious and take years to approve. This is true even when budgets are good. Figuring out how to move faster will be critical moving forward.

On the whole, maybe ChatGPT isn’t the right tool or OpenAI not the right cultural fit for the CSU. A more open contract negotiation would allow faculty and students to weigh in on what models and features best align with the values of our campuses. We believe institutional contracts to democratize access to the models and protect data are good. We also think universities and colleges need to move fast while still doing so transparently and in conversation with stakeholders. This is a difficult balance for large systems like the CSU, but it is one we have to strike to serve both the students and the state. 

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Nik Janos is professor of sociology at California State University, Chico. Zach Justus is director of faculty development and a professor of communication arts and sciences at Chico State. Together, they write about the intersection of teaching/learning and generative AI and how it is disrupting higher education on the blog Melts into Air.

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