One of the most ambitious experiments in embedding an artificial intelligence tool in public schools is making headlines as the tech company behind the work is mired in uncertainty.
And education companies and leaders of school districts attempting to work together on similarly far-reaching AI projects need to pay attention.
Details around what led AllHere, the company that has been working with the Los Angeles Unified School District, to furlough most of its staff and change leadership, as EdWeek Market Brief reported last week, are still coming to light.
The company has not responded publicly since announcing the furloughs in a brief statement on its website. And officials with LAUSD have said little more than that the school system owns the tool and will be involved in any acquisition of AllHere.
Yet the company is also facing questions about the data privacy practices established for AllHere’s AI-powered chatbot, a tool designed to assist families in the LAUSD — the nation’s second largest district — with an array of academic and logistical questions.
A story in the 74 this week cites a former employee who said he warned the district and its inspector general’s office that platform was collecting data in a way that runs afoul of the school system’s own policies against sharing students’ personally identifiable information, and against data-protection best practices.
The trouble for AllHere underscores broader questions for AI-focused education companies across the market about how ready they are to respond to school districts’ complex needs — at least at the scale being attempted in LAUSD.
Here are four takeaways for education companies in the market and school systems to consider if they’re setting out to forge similar AI-centered partnerships.
1. From the Outset, LAUSD’s Goals With the Project Were Far-Reaching
It was clear from the inception that LAUSD had broad expectations for what it hoped to accomplish with its AI project, and what it would expect from a partnership with a vendor.
The district clearly stated its purpose in its request for proposals, dated Feb. 17, 2023, which was to “create a fully-integrated portal system that will provide ‘one-stop’ for students, teachers, family members, administrators, and others.”
The core goal was to address one of the massive K-12 system’s chronic problems — and one that districts across the country are wrestling with: absenteeism. And LAUSD administrators were clear that they wanted to solve it with the “most current technology in analytics,” and artificial intelligence chatbot features.
The district also wanted to build a more seamless experience for families, made apparent not only by its request for a product that provided for single sign-on , but also in the smaller details, like calling for vendors to use the district’s branding and colors.
“The purpose of the [t]ool is to create a fully-integrated portal system,” LAUSD said in its RFP, “that will provide ‘one-stop’ for students, teachers, family members, administrators, and others to access relevant student-centered data, online tools, and resources that they need to promote student acceleration, growth and achievement.”
2. Attracting Venture Capital Is Much Easier Than Meeting District Demands
Education companies across the K-12 space have attracted enormous amounts of venture capital in recent years, and a portion of that investment has targeted AI-focused projects.
AllHere launched in 2016, backed by the Harvard Innovation Lab. The company raised more than $12 million.
The level of investment reflects underlying district demands for its AI services, company officials have said. AllHere leadership told EdWeek Market Brief recently that they had received inquiries from school systems in 21 countries about helping them with AI strategy.
The company signed a contract worth $6 million over five years with LAUSD in 2023.
Yet venture capital funding, especially for early-stage growth, is hardly an indication that a company is “ready for prime time,” in meeting the complexities of delivering data-secure AI, said Linnette Attai, president of PlayWell LLC, which consults education companies on data-privacy practices.
It’s much more likely the company simply has a promising idea that excites investors.
The industry is set up to reward growth, especially rapid growth. Often that’s what investors or private equity are looking for from an early-stage company, said Attai.
But AI-focused companies also need to be prepared to keep the promises that they make to their clients, Attai said. Sometimes that means doing the opposite of what investors want, and slowing things down.
In an interview with EdWeek Market Brief in April, AllHere CEO Smith-Griffin said the company was aware of the concerns from districts and advocates about data-privacy protections in an AI tool.
School systems “have to create policies, standards, and guidelines over everything from the governance of data to also defining what AI tools can and can’t have access to, in terms of student information,” Smith-Griffin said at the time.
“They also need to do work to make sure that the vetting of any AI tools honors existing law. A lot of AI is embedded in a lot of tools that they have already purchased but just weren’t marketed in that way.”
Investors may be growing more circumspect of companies’ AI promises. A number of analysts have told EdWeek Market Brief that the proliferation of AI-focused products is fueling consolidation in the market, as investment outpaces district appetite for the technology.
3. AI Companies Will Face New Scrutiny About the Quality of Their Privacy Protections
School districts demand in requests for proposals and contracts that vendors comply with a host of policies, including those focused on student data privacy.
But many of those policies aren’t written with any specific company, much less an AI-powered one, in mind. So it’s up to vendors to sort through what’s most important, and where noncompliance would create risks for the company and the district.
“I’ve seen plenty of districts give [a company] a book of 100 or 300 pages,” Attai said. “Great, this tells me everything from when the kids can go to the bathroom to when the board meetings have to happen. What is applicable to me?”
Privacy and security are extremely complicated topics. It puts you as a company to be carrying the burden and going above and beyond when it comes to your privacy and security practices, regardless of what your district is asking for.
Linnette Attai, president of PlayWell, LLC
Even if a district has a policy around data policy and security, it may not cover all of the possible areas of vulnerability for companies or industry best practices.
“Privacy and security are extremely complicated topics,” Attai said. “It puts you as a company to be carrying the burden and going above and beyond when it comes to your privacy and security practices, regardless of what your district is asking for.”
In its request for proposals for what became its agreement with AllHere, LAUSD referenced a handful of different policies it expected vendors to adhere to, including federal privacy laws, the districts strategic plan, and the state’s policies on family engagement.
Attai, who reviewed the RFP put forward by LAUSD for the new platform, questioned whether it addressed the privacy risks a major school system would take on with a project of this magnitude.
It’s easy for a district to get drawn into “a false sense of security,” she said, if it doesn’t understand all of the implications.
Companies working with AI need to make sure they have know exactly what districts are expecting from a product, and that the tool is extensively beta-tested “way before [they] spend a lot of money” trying to implement it in a school system, she said.
4. Education Companies May Question Whether It Makes Sense to Build AI Products in Tandem With a District
LAUSD’s partnership with AllHere moved away from the typical contractual relationship in the K-12 space, in which a company builds a product or tool and districts purchase it.
In this case, the district owns the technology, and AllHere essentially was brought on to help build it.
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This approach doesn’t need to be scrapped entirely, Attai said. But it does demand that companies question what kind of execution will be needed to make it successful for both parties.
In the April interview, Smith-Griffin said her organization’s work in LAUSD involved gathering information from a variety of stakeholders, including parents.
“We use parent voice heavily,” she said. “We did focus groups within interviews at every stage of the creation process for Ed, where the emphasis was not so much on asking them what they did like, but even more often, ‘What’s not helpful here? What don’t you like?’”
If a district and company co-create an AI tool, Attai said, the plan should cover milestones for development; how to measure effectiveness; and when to move onto the next phase of development.
“Sometimes … you stop developing because you realize it’s not going to work the way you envisioned it,” Attai said. “This idea that we’re just going to put money in there and it’s going to be built — that’s not really how technology works.”
