Why the AI Gold Rush Is Causing College Students to Drop Out
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Here's your money briefing for Tuesday, October 24th. I'm J.R. Whelan for The Wall Street Journal. AI has attracted a mountain of investments as businesses race to adopt the technology. And that's lured some young entrepreneurs to leave college early to launch their own AI companies.
First and foremost, there's a lot of money thanks to ChatGPT's release. And millions of people in their homes could see that generative AI could write computer code or write almost like a human could. And so that interest is also fueling students' interest here.
We'll talk to Wall Street Journal reporter Lindsay Ellis after the break.
Some students are dropping out of college to create their own AI startups. Wall Street Journal reporter Lindsay Ellis joins me. So Lindsay, what is it about the AI market that's causing some people to leave college?
First and foremost, there's a lot of money. A lot of investors are trying to back good ideas connected to artificial intelligence. So there are a lot of opportunities that young entrepreneurs see to potentially take advantage of. And the last year has been huge to spark interest in generative AI. Last fall, toward the end of 2022, there was a huge influx of interest in the technology thanks to ChatGPT's release. And millions of people in their homes could see that generative AI could write computer code or write almost like a human could. And so that interest is also fueling students' interest here.
This sounds familiar. Did we see something like this in the past?
So there have been waves of dropouts to go into tech in the past.
Why are college students leaving school to start AI companies?
I mean, the dot-com boom, when social media was really taking off. I mean, we all know the household names, Mark Zuckerberg, Bill Gates, Steve Jobs. All of these guys are extremely high profile college dropouts with billion dollar ideas. Not every dropout, of course. Very few of them will get to that level. But there have definitely been key cases that... sort of perk up students' minds to maybe this is a path that I'll go down.
You recently spoke to several people who've gone down this road. Why did they choose to step away from college now? Why not do some AI work but also get a degree and have that on their resume?
So there are a couple of different factors then. Many entrepreneurs told me that the trigger point for them was when they got that key investment or when they got into a startup accelerator. That made the decision quite easy. There was also a factor of timeliness too. So it's like strike while the iron is hot. Exactly. I spoke with a man named Jay Dang, who withdrew from UC Berkeley earlier this year. He had teamed up with a FlowGPT is basically an online library of applications that use generative AI, in some ways can replace human work, can write marketing materials or edit your resume or cover letter.
How did ChatGPT and generative AI spark student entrepreneurship?
Jay, before he made the decision, he sort of asked around to other people he knew who had dropped out and started a business. to basically say, is this the right call? But he did pull the trigger. He left during his sophomore year, and now he says, this is the best decision that I've ever made. His company now employs eight full-time workers, has millions of users, he says, each month. And to him, this bet really paid off.
What are these students up against? What kind of an effort goes into building a successful AI startup?
Many investors told me that to succeed in entrepreneurship connected to AI, you really need to have a lot of very good data, that that is the difference maker between a lot of different companies.
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