Chicago’s $10 Billion CPS Problem Needs a Made-in-Illinois AI Solution

The AI pathway to school savings and expanded support

“UIUC has a land-grant mandate to help solve Illinois’ biggest problems. Gies has the technology and talent. Chicago has 316,000 students falling behind and 24,000 hard-working teachers who need real support. Why hasn’t someone put them together? The new school board and UIUC need to act now.”

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Chicago currently faces a $10 billion paradox. Chicago Public Schools (CPS) is taxpayer-funded, and schools consume roughly 55 percent of all property taxes in Cook County, including residential and commercial properties. At an annual cost of over $30,000 per pupil against a $10.25 billion FY 2026 budget for its 316,000 students and 24,000 teachers, the district is spending more than many elite private high schools and the results are falling far short. Even with the state’s recent lowering of the proficiency bar, roughly 75 percent of students are not proficient in math and nearly 60 percent fall short in reading. This leaves our future workforce and our city in a compromised position.

Shockingly, while school districts around the country — and companies large and small — are making meaningful investments in AI to enhance outcomes and capture economic efficiencies, CPS has established guidance and governance on AI strategy but has not yet put forward a clear public strategy for the kind of ambitious, system-wide AI integration that could meaningfully change outcomes for 316,000 students or materially reduce its $10 billion annual budget.

We need to address this immediately through strategic planning and collaboration or watch our students struggle for many years to come. With every seat on the Chicago Board of Education up for election this November, the moment to force the issue is now. Getting this done right will empower students, help repair the budget, and reduce the exodus that has shrunk Chicago’s middle class from 50 percent to just 16 percent of the population.

With property taxes in Cook County roughly double the national average, Chicago cannot tax its way out of this. We must innovate.

A made-in-Illinois opportunity

The great news is that the solution is “Made-in-Illinois,” resting on the historic land-grant mission of the University of Illinois: To deploy world-class research for the public good of Illinoisans.

At UIUC, the Gies Disruption Lab’s Contextual AI Avatar project provides a state-of-the-art toolkit. Unlike ChatGPT, these avatars are trained specifically on vetted and defined internal curriculum. They are designed to stay within a closed set of district-approved materials, which sharply reduces the risk of hallucination.

By implementing this UIUC technology, CPS can significantly expand 1-on-1 support at affordable costs for every one of its 316,000 students and its 24,000 teachers with a 24/7 AI teaching assistant capable of supporting students and teachers across subjects and in multiple languages. This scales 1-on-1 support in a way that is humanly impossible and fiscally unimaginable without this type of cutting-edge technology. For the many tens of thousands of struggling students, this access could accelerate test score improvement as well as prepare them for future career opportunities.

As Executive Associate Dean of Academic Programs at UIUC, Nerissa Brown has noted in her recent publication, student expectations for technology that opens flexible learning options have accelerated the adoption of course-specific AI tools. Custom AI chatbots are now trained exclusively on instructor-approved materials and are used to provide 24/7 access to course content and instructor-approved supplemental information. These tools instantly relieve teachers from having to answer the same questions from different students.

When UIUC instructor Mandi Alt launched this AI chatbot in her course, she reported a staggering 75 percent drop in repetitive questions. That allowed her to apply that newfound time to feedback, mentoring, and deeper teaching.

The Gies infrastructure advantage 

The second piece of the opportunity is the infrastructure behind it. At the University of Illinois Gies College of Business, researchers are already developing the tools Chicago could leverage.

For example: The Gies Disruption Lab has a cutting-edge system referred to as “LLM Inference.” This technology allows large language models (AI) to run on distributed, existing hardware, potentially saving tremendous money, as compared to centralized cloud clusters. For a district the size of CPS, this could represent a significant cost savings.

By running AI models on existing school servers, laptops, and local networks instead of relying on costly cloud subscriptions, CPS could dramatically cut expenses on student data processing, scheduling systems, FOIA responses, bus routing optimization, administrative reporting, and a wide variety of other areas.

This distributed approach delivers high performance at a fraction of the cost of those recurring cloud bills — often without sacrificing performance. Organizations running high-volume workloads this way routinely see two to four times lower total costs. CPS could also potentially cut technology infrastructure costs by 15–40 percent and slash cloud-API spending by more than 60 percent once the system is running at scale.

The next logical step is a focused partnership with the Gies Disruption Lab to run a real pilot, measure the actual savings on CPS hardware and systems, and then scale what works.

Even capturing a meaningful share of these efficiencies could free up tens of millions of dollars a year, and potentially more than $100 million over time, that currently go to cloud bills and administrative overhead.

This is not about replacing our valuable and dedicated teachers. It is about giving them powerful partners and additional resources so they can focus on mentorship, advancing the curriculum, relationships, social and emotional intervention, and motivation.

Three immediate steps for Chicago

Here are three crucial steps Chicago, and its newly elected school board, can take:

First, establish a dedicated CPS AI Integration Office.

This needs a clear mandate to generate savings for the express purpose of repurposing a large part of those savings into core instruction and classroom support. By aligning the savings with more support for teachers and students in the classroom, the students win.

Second, work out the details of a comprehensive civic-academic partnership with the Gies Disruption Lab.

The lab’s leadership and core of talented UIUC graduate and undergraduate students can successfully tackle a project of this scope and importance. Chicago should use the Gies Disruption Lab as its primary laboratory. This partnership between CPS and the University of Illinois perfectly honors the original historic Land-Grant mission by exporting world-class innovation to solve the state’s most critical urban challenges. What could be a better match for UIUC’s Land-Grant mandate?

Third, we need to define AI Proficiency and Ethical Standards.

To prepare our students, AI literacy should be established as part of the core curriculum alongside ELA, Math, Science, History, and Foreign Language. This includes training and daily work on AI ethics, so students understand what tools and practices to avoid and the fundamental reasons why those tools and practices need to be avoided. Students need more than rules; they need clarity.

In addition, we must also adopt Proof of Work standards, so students learn how to show their prompts and explain their reasoning. By incorporating these steps, we turn AI from a potential shortcut into a genuine skill that will give them a competitive advantage over their peers around the country. They will be in an ideal position to take advantage of the job opportunities of their generation.

The choice ahead

The current school system is plagued with costly spending from administrative as well as programmatic inefficiencies that are producing unacceptable outcomes, and continued population stagnation and decline. That can change dramatically and quickly. We already have the data. We have models that work. What we need now is the courage to make an asymmetrical bet and move from chronically falling short with our students to providing a platform for them to thrive.

With collaborative, ethical, and Made-in-Illinois AI solutions, we can turn our city’s most important investment into our greatest advantage. Every Chicago student deserves a real chance at success. This is our chance to make that a reality.

This November, Chicago voters will elect every member of the Chicago Board of Education. Every candidate must be pressed — publicly and specifically — on where they stand on integrating AI into CPS in a way that makes the district a leader among large-city school systems worldwide, with AI literacy embedded in the core curriculum. Vague support is not enough. Voters deserve clear commitments on the AI Integration Office, the UIUC/Gies partnership, and measurable classroom impact. They deserve to know which candidates are willing to test, measure, and scale new ideas that could put more of CPS’s $10 billion budget to work for Chicago’s most valuable assets, its students.

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Leo Fiascone is a Chicago-area high school senior, founder of Chicago Rising, and the creator of an AI for Main Street including an AI-assisted citizenship tutoring platform at Erie Neighborhood House.

He researches and writes on urban policy, ethical AI, and practical solutions for Chicago families.