UW–Madison’s Frank Fernandez, an associate professor in the School of Education’s Department of Educational Leadership and Policy Analysis, was recently featured in The EDU Ledger for his expertise on how artificial intelligence (AI) is reshaping higher education financing. 

The article, “Universities Are Betting Big on AI — and Some Are Already Cashing In,” examines how colleges and universities are investing in AI while navigating financial pressures, declining public funding, and shifting economic realities.

The story highlights institutions such as the University of Michigan, whose investment in OpenAI has reportedly generated significant returns for its endowment.

“What we’re seeing with Michigan’s endowment and its investment in OpenAI is impressive, but it is part of a larger trend in higher education finance,” Fernandez said.

As state support for higher education has decreased, Fernandez noted that many universities have adopted investment strategies that offer greater potential returns but also carry greater risk.

“For decades, we’ve seen endowment managers invest in increasingly risky assets with higher potential returns — for example, international emerging markets,” Fernandez said. “It can seem odd to think of universities investing in things like OpenAI, but they’re trying to meet the public’s expectations alongside the public’s constraints.” 

Fernandez also pointed to a tension at the center of the conversation about higher education funding. “We want them to maintain their status as world-class research powerhouses, but we have an inability or unwillingness to provide more public funding for higher education,” he said. 

Read the full article in The EDU Ledger.