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Most major AI models released in 2025 came from private industry rather than universities, which are falling behind in compute capacity and frontier research development. While universities maintain a monopoly on degree-granting, they risk technological obsolescence by treating AI as a distraction rather than embracing it as a fundamental transformation of higher education's business model. China's universities demonstrate how alignment with national AI goals can create a competitive advantage, whereas U.S. universities are largely sidelined from the frontier AI race.
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