Sebastian Thrun gives a talk about the recent online AI course which he and Peter Norvig delivered at the end of last year. This was apparently quite successful, and now he plans to continue the same kind of education system with a new venture called Udacity, starting with two new courses on building a search engine and programming a self-driving car.
As Thrun points out, the existing university system hasn't seen much innovation over the past 1000 years, and the internet allows new forms of interaction between teacher and student in which education can be delivered at scale whilst still feeling like one-on-one tuition. Counter-intuitively the students paying $30,000 at Stanford preferred the online lectures to ones delivered conventionally in person.
There definitely seems to be a need for changes in how higher education is delivered, since the existing way of doing things is becoming prohibitively expensive and obviously suffering from scaling issues (hence the "weeder" effect).
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