Microsoft introduces a free AI assistant for educators in the U.S. in collaboration with Khan Academy.

• Microsoft is collaborating with Khan Academy to provide a free AI-powered assistant to all teachers in the U.S. as part of an expansion plan for the Khanmigo tutoring tool, which currently uses OpenAI's GPT to assist approximately 65,000 students.
• The AI can help create lessons, analyze student performance and recommend assignments.
• Microsoft and Khan are developing smaller language models for student math tutoring, which are more precise versions of the large language models used in generative AI like GPT.

All teachers in the U.S. will receive a free generative AI assistant from Microsoft, in partnership with tutoring organization Khan Academy.

As of Tuesday, Khanmigo for Teachers, a program that assists teachers in preparing lessons for class, is available for free to all educators in the U.S. The program can aid in creating lessons, evaluating student performance, assigning tasks, and offering teachers the chance to improve their own learning.

According to Sal Khan, founder and CEO of Khan Academy, this technology is no longer a luxury but a necessity for many teachers, as he stated in a CNBC "Squawk Box" interview on Friday before the deal.

Microsoft-funded artificial intelligence company OpenAI's top executives, Sam Altman and Greg Brockman, initially focused on partnering with Khan Academy due to its interactive exercise platform when looking for a socially positive use case for GPT.

During a recent virtual event with members of CNBC's Technology Executive Council, Khan demonstrated his company's AI education tool, Khanmigo. Despite initially being skeptical about working with OpenAI and GPT, Khan became discouraged when the public conversation in 2023 quickly turned to students cheating with AI. However, he told the tech executives that what he's now seeing from his nonprofit's work to adapt AI for the classroom is a scaling of the personalization that matches the founding story of his organization - when he personally provided tutoring to his cousin Nadia.

Khan stated that AI could aid in achieving the ideal of emulating a great tutor, in addition to the efforts already made over the years, while addressing concerns about hallucinations, errors, safety, privacy, and cheating.

"According to Khan, the AI system passes the Turing Test, as it is indistinguishable from when he communicated with Nadia in 2004," the tech executives were told.

Microsoft and Khan Academy are planning to offer more AI-powered math tutoring to students through a new open-source small language model from Microsoft's Phi-3 AI technology. Small language models are more targeted versions of large language models like GPT, which focus on smaller data sets. The AI math tutor can provide specific grade level guidance and customized tutoring sessions for students and teachers, and in the future will give students feedback on handwritten work. The first level of focus is middle school, but more grades will be added.

In the demo Khan provided to tech executives on the CNBC call, he demonstrated how personalization was rapidly advancing, from an AI correcting a student's math mistakes in a "nuanced tutoring" method that doesn't reveal the answer, to a student protesting the need to learn about biology and the AI explaining how the knowledge could be valuable later in life.

Khanmigo, a nonprofit AI-powered educational tool, was introduced to schools with hundreds of students and teachers a year ago and is now used by approximately 65,000 students and teachers as part of formal instruction, with school districts paying around $35 per student annually. However, due to the high cost of computing power required for AI, Khan's nonprofit model cannot cover the expense without charging per user.

Khan plans to expand the pilot of Khanmigo for the next school year as many more school districts are interested in it. He stated during his "Squawk Box" interview that the costs are coming down quickly and he hopes that with the advancements in technology, the costs can be brought down to the $10-$20 range in the next year.

Microsoft's Copilot AI will receive more content from the education nonprofit, with Khan Academy content added and Khan Academy content integrated into Microsoft Teams for Education.

"If you're passionate about education, you need to read this book," Gates wrote on X. Microsoft co-founder Bill Gates recently recommended Khan's new book on AI in education.