Artificial intelligence (AI) has proven to be a game-changing technology of this century, nipping at every industry. The education sector is no exception.
The global AI in education market is projected to grow from $4.8 billion in 2024 to $75.1 billion by 2033, reflecting a 34.03% CAGR, according to the IMARC Group report. This anticipated expansion underscores the increasing adoption of digital platforms and technologies in education, which is expected to significantly elevate the proportion of the market that is digitized in the coming years.
This post offers a snapshot of the current state of AI in EdTech, highlighting the most promising use cases and product growth opportunities.
The State of AI in EdTech: Summary
As we said earlier, AI in the education market is projected to soar to $75.1 billion by 2033, a significant rise from $4.8 billion in 2024.
The growth of AI in EdTech is driven by the following factors:
- Rising demand for personalized learning experiences
- Expansion of educational opportunities (e.g., adaptive learning, virtual assistants)
- Alleviation of administrative burdens
- Government support and policies
- Growing focus on data-driven decision-making
AI models have the potential to take over multiple mundane admin tasks such as student orientation, transcript reviews, and prospect outreach. In fact, 42% of teachers reported that using AI reduced the time spent on administrative tasks, according to the EdTech Magazine 2024 review.
In the classroom, AI can provide real-time feedback to students and give suggestions to instructors for personalizing their teaching methods. For example, an AI-driven feedback tool used by Education Perfect, an EdTech company, led to a 47% improvement in students’ final response quality, showcasing how tailored feedback can enhance learning outcomes.
Source: Market.us
AI usage among students
About 86% of students already incorporate AI into their studies, with 54% using AI tools weekly (Digital Education Council’s 2024 Global AI Student Survey). AI and education tools are making a tangible difference. The Quizlet’s 2023 State of AI in Education Report revealed that 73% of students report a better understanding of learning materials.
Overall, emerging use cases of education AI are expected to add value to the education, assessment, and administrative processes. EdTech companies with the best AI educational products will enjoy faster user base growth and increase profitability.
AI in EdTech: 7 Market-Tested Use Cases
AI technologies can create fundamentally new ways of teaching by providing instructors with more efficient ways to generate instructional content, track student progress, and personalize learning tracks.
Most educators recognize AI as a friend, not a foe. In fact, even UNESCO issued a support declaration for harnessing the potential of AI technologies to achieve the Education 2030 Agenda.
To better understand where AI can make the most impact, we rounded up the most mature AI use cases from EdTech companies. Learn which solutions are in demand to better shape your product development strategy.
1. Intelligent Tutoring Systems (ITS)
An intelligent tutoring system (ITS) is a new breed of learning management (LMS) system aimed at bringing extra efficiency and personalization into instructional design with AI capabilities.
The “intelligence” component of ITS comes from using various machine learning (ML) and deep learning (DL) techniques in four system components:
- Knowledge base: domain information, used for generating instructions and tests.
- Student base: representation of the student’s current knowledge state and progress.
- Pedagogical module: a collection of instructional approaches and techniques, used for training.
- User interface: a modality for enabling an effective exchange between an ITS and a student.
AI is being effectively infused in every element of such systems and has already proven to harness positive performance outcomes. According to the 2024 study “A Comparative Study of Learning Progress with AI-Driven Tutoring”, ITS technologies have been shown to improve learning efficiency. For example, a study involving the AI teaching assistant Syntea reported a 27% reduction in study time among university students, demonstrating the effectiveness of AI in accelerating learning.
AI can also substantially speed up training model development. Ken Koedinger of CMU’s Human-Computer Interaction Institute (HCII) recalls that the first generation of ITS required about 200 development for each hour of tutored instruction. This made educational software development a labor- and time-intensive effort. The new AI-led model training approaches, in contrast, require about 30 minutes of human instruction for creating a 30-minute lesson plan.
AI-powered learning can be also highly personalized, progressively adapting the instructions to every student’s learning pace and instructional preferences. Thanks to advances in natural language processing (NLP) and the proliferation of large language models (LLMs), intelligent tutoring systems can now also provide personalized feedback and explanations to free-hand student queries, similar to those of a human educator.
Korbit, for instance, leverages a suite of machine learning (ML), natural language processing (NLP), and reinforcement learning (RL) models to provide personalized mentorship in software engineering.
Users with personalized feedback enabled on average have higher learning gains than those who aren’t using AI-powered functionality. Moreover, Korbit’s ML, NLP, and RL models continuously learn online based on live interactions with students, adjusting themselves automatically to new activities and content.
GoStudent, Vienna-based language learning company, also places high hopes on AI. The unicorn startup, already boasting a €3 billion valuation, closed a $95 million funding round in August 2023. In March 2024, GoStudent announced that it had reached profitability across its global operations, marking a significant turnaround from previous years of substantial cash burn. Its key priority: build out an AI lesson plan generator, trained on the local curriculum to make their human tutors more productive. The team believes that by combining traditional tutoring with bespoke, AI-powered personalized learning paths, they’ll be able to deliver truly individualized learning paths for each user.
2. Adaptive classroom teaching
Artificial intelligence in education offers transformative potential in adaptive teaching, enabling real-time personalization at scale. For example, 63% of K-12 teachers use ChatGPT, with 84% reporting positive classroom impacts. Adaptive AI systems analyze students’ performance, providing guidance when they struggle and suggesting more challenging tasks when they excel.
Indeed, AI can be an effective medium for delivering personalized tutoring by analyzing students’ knowledge gaps and suggesting new areas for a learner to explore. AI algorithms can monitor how students progress through an assignment, how long they take, and whether they are successful. If the student is struggling, the system can provide contextual guidance. If they are succeeding, the app will propose more challenging tasks. In other words, adaptive AI systems can provide real-time, personalized feedback on a scale impossible for a human educator.
Researchers at Stanford, for instance, recently presented a mobile inquiry-based learning environment, code-named SMILE. The system allows students to quickly create a personalized list of questions or homework assignments, based on their own learning for the day.
For example, students can snap a photo of a diagram from a textbook or any phenomenon they’ve observed in the lab to create a homework item. Teachers can then easily review all the student-generated assignments and select the most useful ones. Extra rules for quality control can be programmed on the local level.
In addition, the app automatically collects all the generated student questions during class, organizes them in a shared pool, and uses them to create daily quizzes for the group.
By creating their own questions and sharing them with peers, students can better retain information and learn from peers’ questions. Quiz activity is controlled through the teacher’s app, with results becoming instantly available. Based on them, the teacher can choose to focus on areas where the group lacks understanding.
While AI tools drive personalization, combining AI with gamification can further enhance learning experiences. For example, our team helped GoIT, an IT eLearning company, develop several analytics-driven personalization and gamification modules for their online learning platform. Students can compete in friendly intellectual “duels” and track their ratings against peers. Using big data analytics, we have also added features for high-level content personalization, which allow course developers to create adaptive content for different types of learners. Together, AI and gamification create engaging and effective learning environments tailored to diverse student needs.
Intelligent textbooks are another interesting use case of AI in EdTech. The new generation of textbook apps can monitor students’ progress, analyze their studying patterns, and provide interactive learning experiences, ranging from personalized quizzes to auto-prompted highlights or voice-guided navigation.
They can also help augment students’ experience with physical instructional materials. For example, the Microsoft Math application uses optical character recognition (OCR) technology to recognize written math equations and propose step-by-step solutions to them, alongside detailed explanations and interactive graphs to facilitate comprehension.
Overall, AI can positively transform the learning process by adapting the instructions to the student’s learning pace and preferences. Such a degree of personalization, backed by proven tutoring methods, can substantially improve the speed and quality of education.
3. Automated test assessments
Teachers spend almost seven hours per week on student testing and assessment activities, which tallies to over 265 hours per year. Long hours can result in low job satisfaction and higher staff turnover. For example, in September 2024, 57,000 U.S. teachers and private educational staff quit their jobs — the highest point since April 2022 during the COVID-19 pandemic (Statista).
Apart from being labor-intensive, standardized test scoring also takes away time from active instruction. A 2024 survey by the Pew Research Center revealed that 84% of K–12 teachers feel there isn’t enough time during the workday to accomplish all expected tasks, including grading and assessments. An analytical study, conducted in New York State, arrived at similar conclusions: Schools spend twice as many annual instructional hours on test administration as required by the current legislature.
AI-powered test assessment tools can help teachers reclaim some of the time on grading standardized tests, plus help develop more personalized tests.
The new generation of automated essay scoring (AES) systems rely on NLP to analyze and grade students’ submissions with the same accuracy, consistency, and integrity as human educators. IntelliMetric, for example, says that its AI-powered essay scoring algorithm has successfully graded over 100 billion essays, receiving high evaluation scores from the US Department of Education. Gradescope, in turn, boasts a track record of 700+ million successfully graded answers to test questions. The AI-powered app automates the grading of both variable-length and fixed-template assignments across all university-level classes.
Apart from streamlining assignment reviews, AI algorithms can also help with test creation. Unlike traditional rule-based generators, which require a lot of contextual prompts, AI-based systems can automatically scan the provided topics to generate quality questions and adapt tests to personalized learning objectives.
A new French startup Nolej, for example, uses OpenAI models to analyze provided instructional materials (texts, videos, audio files, or even website pages) and then generate multiple assessments and micro-learning assignments. Available in Google Classroom Ecosystem, the app enables educators to create interactive content and on-the-fly quizzes in real-time. In December 2023, Nolej secured €3 million in funding to accelerate its expansion and further develop its AI copilot for teachers. In 2024, Nolej AI was honored with the Global EdTech Start-up Award.
4. Student performance analytics
Almost 40% of teachers spend more time recording and analyzing student data than preparing for lessons. Yet, they still cannot always capture and implement all qualitative feedback from a large student body.
AI can help procure granular insights on each student’s performance to drive better individual and group outcomes. For example, machine learning algorithms can track students’ academic progress and alert instructors when students are at risk of failing a course. The algorithm analyzes assessment results, students’ attendance, and exam grades to quantify their academic positions. Then provides the instructor with consolidated findings.
Another explainable AI model analyzes students’ academic performance and gives them actionable recommendations for doing better in the selected course. Among the tested group of Swedish students, 80% rated the AI recommendations as actionable and helpful.
In the K21 sector, Schoolytics leads the race in data-driven instruction. The platform provides easy-to-set-up analytics dashboards for students, teachers, and parents. Each can track their academic performance, upcoming assignments, and other set KPIs. With comprehensive data, teachers can initiate timely intervention to get the student back on track. Schoolytics gives actionable student data to the frontend while handling advanced data processing at the backend.
Discover how 8allocate helps EdTech companies speed up time-to-market for AI-powered products.
5. Streamlined student enrollment
Administration processes such as student enrollment, onboarding, and orientation take up a lot of educational institutions’ resources. For instance, a 2023 report by GOV.UK revealed that 75% of classroom teachers and middle leaders in England felt they spent excessive time on general administrative work rather than teaching.
AI for education can facilitate document-handling processes to enable faster and fairer admissions. For example, Georgia State University leverages “Pounce,” an AI-powered chatbot, to assist incoming students with enrollment and reduce “summer melt.” Pounce delivered over 200,000 answers to questions from incoming freshmen during its initial implementation, providing tailored interactions for each student’s enrollment tasks.
To reduce attrition, leading educational institutions turn to technology. Aible, for example, developed an AI model for optimizing student enrollment and retention. Using Aible, administrators can find out which students are most likely to drop out within a defined timeframe and implement cost-effective retention strategies. The platform also identifies students, who could benefit from extra tutoring or participation in study groups. Nova Southeastern University, for example, improved first-time college student retention by 17% in 15 days with Aible’s solution.
6. Generative content creation
Nearly six in ten U.S. instructors (58%) employ generative AI in their daily teaching practices. Generative AI in EdTech tools can help educators create high-quality training materials at faster speeds.
For instance, Prof Jim helps educators turn written content into video lectures, narrated by an AI avatar. The tool scans the provided textbook PDFs to auto-generate presentation slides and a narrated video script. Teachers can also opt to create embedded quizzes from the same material.
Go Skills, in turn, recently launched Genie — an AI-powered course authoring tool. Based on the provided prompts and pre-programmed rules, the chatbot can generate a course summary, outline, and lesson content. All that’s left is to validate and edit the materials.
Apart from adaptive content generation, education AI can also help create for multi-language learners, whose command of English may slow down their progress. For example, IMC Express, an e-Learning authoring platform, supports AI-driven content creation in over 50 languages.
Educators will have a better opportunity to create engaging, interactive learning experiences by using generative AI assistants—and do so at a faster scale. As Lama Ahmad, a policy researcher at OpenAI, summed it up well: “I hope that educators, policymakers, and technology companies can work together to design standards for safe, helpful, and responsible AI systems.”
7. Conversational AI for language tutoring
Language learning is already a $61 billion industry, set to grow further at a CAGR of over 20% until 2032, propped by increased globalization.
The market has been mostly dominated by two types of players:
- Language learning apps like Duolingo and Rosetta Stone, among others, offer a self-paced learning experience.
- Online language tutoring platforms like Preply and Lingoda, offer on-demand access to private and group classes, led by human tutors.
Now a third force is entering the stage: digital language learning apps powered by embedded spoken natural language processing. Thanks to recent breakthroughs in self-supervised learning and deep learning, NLP algorithms can now be trained to recognize more nuances in human speech: tone of voice, pronunciation, and sentiment. Such algorithms can be trained to listen to the students and accurately evaluate if they’re mastering the language and aid them in improving their proficiency.
EdTech startup Loora improves users’ conversational English skills with a voice-guided feedback system. Using an advanced speech-to-text model, it detects grammar mistakes and provides feedback on pronunciation, prosody, and fluency. In 2023, Loora raised $9.25 million, aiming to bridge the gap between digital apps and costly human-led classes.
South Korean Speak has pioneered a similar voice-first English learning app, boasting a 95% accuracy rate in error detection. Users can have open-ended English and Spanish language conversations with an AI tutor, that’ll give instant feedback on pronunciation, grammar, and vocabulary. Their product is powered by a combination of OpenAI and proprietary speech recognition models, trained on a substantial data set of second-language labeled speaking examples.
As people tend to learn languages to achieve conversational fluency, AI-powered language learning apps with voice recognition are well-positioned to lure users from competing products. At the same time, online language schools can scale their operations by promoting classes with AI tutors to supplement human-led courses.
Conversational AI stands at the forefront of this transformation, bridging the gap between human interaction and digital accessibility, offering learners an interactive and effective way to master new languages.
To Sum Up
Educational technology has changed the nature of work and the educational sector must keep up with the new demands. Likewise, the number of adult learners (aged over 25) has increased substantially as people seek to upskill and reskill.
EdTech players have ample new markets to explore — from enterprise eLearning to digital textbooks for the university sector and AI-powered classroom analytics. With steadfast momentum going, now is the optimal time to double down on product development.
How 8allocate Helps EdTech Brands Harness the Growth Momentum
8allocate helps EdTech brands develop software products faster and at an optimal price point. As your partner, we can help you stuff a dedicated project team, augment your in-house expertise with our AI & ML experts, or provide ongoing technology consulting.
Innovative EdTech products we have helped deliver:
- Intelligent tutoring systems with adaptive learning algorithms
- Cloud LMS and digital e-Learning platforms
- Web and mobile educational apps with cutting-edge features
- Robust student analytics solutions and dashboards
8allocate would be delighted to support your company’s growth efforts. We’d be happy to provide customer case studies. Contact us to learn how we can deliver innovative AI products together.
Frequently Asked Questions
Quick Guide to Common Questions
How can AI improve learning outcomes in EdTech?
AI enables personalized learning experiences by analyzing student progress and adapting instructional content in real time. It helps identify knowledge gaps, provide targeted feedback, and optimize learning paths, making education more engaging and effective.
What are the key AI-driven solutions transforming EdTech?
AI is reshaping education through:
- Intelligent tutoring systems that provide personalized learning experiences.
- Adaptive teaching solutions that adjust curriculum based on student performance.
- Automated test assessments that streamline grading and feedback.
- Student analytics platforms that offer data-driven insights for educators.
- AI-powered enrollment tools that optimize student admissions and retention.
- Generative AI for rapid content creation and course design.
- Conversational AI tutors that enhance language learning through real-time feedback.
How can AI help reduce educators’ workload?
AI automates grading, student progress tracking, and content generation, allowing educators to focus on delivering high-quality instruction. Smart assessment tools and AI-driven analytics minimize administrative burdens while maintaining high educational standards.
How does AI improve student performance tracking and intervention?
AI-powered student analytics solutions provide real-time insights into student engagement, attendance, and performance. Predictive models can flag at-risk students early, allowing educators to intervene with personalized support strategies.
How does AI streamline student enrollment and retention?
AI-driven solutions automate admissions processes, handle inquiries through AI-powered assistants, and analyze student data to improve retention rates. AI can also optimize student placement based on learning patterns and engagement levels.
How does AI enhance language learning and tutoring?
Conversational AI solutions provide real-time feedback on pronunciation, grammar, and fluency, allowing learners to practice and refine their skills interactively. AI tutors enable scalable, immersive learning experiences that mimic real-world conversations.
How does 8allocate help EdTech companies implement AI-driven solutions?
8allocate helps build AI-powered EdTech platforms, intelligent tutoring systems, adaptive learning tools, and student analytics dashboards to drive personalized learning, automate processes, and improve student engagement. Our expertise ensures seamless AI integration, scalability, and long-term impact.
