Welcome to Playground Post, a bi-weekly newsletter that keeps education innovators ahead of what’s next.

Here’s what we have on deck for today…

1. The Department of Education is playing venture capitalist

2. Why OpenAI ditched the nonprofit model

3. The $75B opportunity education innovators can't ignore

The Department of Education is playing venture capitalist

The Department of Education is offering up to $1.25M in R&D grants for small edtech companies. If your company has fewer than 500 employees, you’re eligible.

Last year, nearly half of the funded projects had something to do with AI, but interactive learning was pretty popular as well.

If you’re looking for (or know someone looking for) funding for their edtech project, here’s a link to apply.

Why OpenAI ditched the nonprofit model

OpenAI launched in 2015 as a nonprofit to ensure AI would “benefit all of humanity.” Fast forward to 2024, and they raise $6.6B at a $157B valuation, with a contingency that they must fully transition to a for-profit business within the next two years. Why the change?

In other words, scaling AI requires astronomical amounts of capital that nonprofits simply can’t access. Traditional philanthropic funding models aren’t built for the massive, continuous capital requirements of cutting-edge tech like AI. While OpenAI maintained its mission through a “capped-profit” model, Altman admitted staying at the forefront of AI development would be nearly impossible as a pure nonprofit.

Entrepreneurs: If you are building capital-intensive tech in a non-profit environment, have a candid conversation about funding models early. The nonprofit structure may work at first, but could become a barrier as you scale.

Investors / Advisors: Mission-driven orgs may need to evolve their structure as they grow. The nonprofit vs. for-profit decision isn’t just about mission — it’s about long-term viability of the organization.

The $75B opportunity education innovators can't ignore

President-elect Donald Trump has promised to close up the Department of Education and send education decisions back to the states. What does this mean?

Four key funding areas could see significant shifts:

1. State grants: Title I and IDEA funds ($40B+ annually) might go directly to states with fewer restrictions. That means 50 states with massive budgets and appetites for innovation.

2. Expansion of school choice: With private school choice enrollment already over 1M students and growing, new funding streams are opening for personalized learning solutions and alternative education models.

3. Special education: IDEA funding could shift to block grants, creating demand for cost-effective special education solutions that states can implement independently.

4. Changes in curriculum: While some content areas face scrutiny, career and technical education is getting a green light (and likely more funding).

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We’ll be back with another edition on Friday. See you then!

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