As the new school year begins, classrooms across the U.S. are testing artificial intelligence tools to flag struggling students, track attendance, and improve reading scores. But school districts are struggling to vet these tools effectively as the AI in education market, which generated $2.5 billion in U.S. revenue last year, is expected to exceed $15 billion by 2033.
Some states and districts have started offering guidance, but educators and experts say the burden of evaluating AI products largely falls on individual school systems. Mark Schneider, a nonresident senior fellow at the American Enterprise Institute, said the industry is moving faster than districts can keep up with.
"There's always an asymmetry between what the providers know and what the districts know," Schneider said. "And the question is, can we set up mechanisms for helping the districts understand what's going on and choosing better."
Billions of dollars are at stake. The overall U.S. education technology market generated nearly $48 billion in revenue in 2024 and is expected to reach more than $90 billion by 2030, according to Grand View Research.
How districts pick AI tools
Scott Langford, superintendent of Sumner County Schools in Tennessee, said his district tested AI to address plateauing middle school reading scores. The district wanted to know whether AI could give students immediate feedback and help teachers see, in real time, where students struggled.
"You have to identify what you need," Langford said. "The (AI edtech) market is so overwhelming for districts and for vendors. … Most of them don't really do much that drives any kind of change for students."
Sumner first tried Coursemojo - an AI-powered literacy tool - in a five-day micro-pilot in a sixth grade classroom, then piloted the tool in half of its sixth grade classrooms. Langford said the strongest tools do not replace teachers but "help them see student understanding more quickly."
The Allentown School District in Pennsylvania uses a two-phase review process for AI programs that includes non-negotiables such as student safety and data security. Superintendent Carol Birks said vendors must ensure all user-generated data remains the district's property and that student data will not be sold or used to train AI models.
"A significant challenge is that the onus of making these decisions is placed entirely back on the individual school district," said Birks. "Although Allentown has built strong internal capacity to handle these responsibilities, guidance from the state level would greatly assist school districts."
School leaders can strengthen their procurement skills through the AI for School Principals Learning Path, which covers policy, administration, and vendor evaluation strategies.
State guidance and legal risks
Several states have stepped in with frameworks. The Pennsylvania Department of Education instructs schools to assess who controls data entered into AI tools, examine third-party data-sharing practices, limit data collection, and keep a human "in the loop" for grading and discipline.
New York City Public Schools updated its privacy and security review process to require vendors to disclose AI capabilities, prohibit using student data to train AI models, and meet transparency standards. Chicago Public Schools released an AI Guidebook and began blocking unapproved third-party AI products from its network in December.
Some AI use has drawn lawsuits. Students and parents in Arizona and Kansas filed federal lawsuits challenging school districts' use of Gaggle, a student-safety monitoring platform, alleging it violated constitutional rights. In Los Angeles, the superintendent resigned after the district paid $3 million for an AI chatbot from AllHere, which later filed for bankruptcy.
"Anything with AI is a risky click," said Leslie Eaves, program director at the Southern Regional Education Board. "There's a lot of tool makers out there that are going to sell you their product and they're going to say it's the biggest and best in everything."
The burden on districts
Districts are being asked to do too much on their own, said Sue Thotz, director of outreach for Common Sense Media. A California data privacy agreement from the California Student Privacy Alliance creates a blanket agreement vendors sign onto, reducing the need for each district to negotiate privacy terms from scratch.
"Placing the burden upon a district to make sure that every single vendor they're working with is in full compliance with their state and federal laws when it comes to privacy - that's a tall order for districts that are already stretched very, very thin," Thotz said.
Districts may also be sorting through an accumulation of a decade's worth of technology purchases, said Tracy Weeks, senior director at Instructure, the company behind the Canvas learning management system. An Instructure report found districts averaged access to 3,001 digital tools, while students and educators used only four on average.
"What I think has happened is that I think we did a lot of digital hoarding," Weeks said. Districts are now asking, "What are the things we should actually keep? What can actually move the needle?"
Teachers can learn to integrate these tools effectively through the AI for Teachers Learning Path, which covers classroom tool selection, lesson planning, and bias detection.
Why this matters for education professionals
For school and district staff, the AI procurement problem has direct financial and ethical consequences. Shrinking budgets and the expiration of federal pandemic-era funding mean districts cannot afford to spend millions on tools that do not improve outcomes or that expose them to lawsuits. Educators who understand how to evaluate AI vendors - from data privacy agreements to bias detection in classroom tools - will protect students and their own career options in an increasingly high-stakes market. Dacia Toll, co-founder of Coursemojo, said districts should first ask whether an AI product aligns with cognitive science and strong teaching methods.
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