North Carolina's $10 Million Khanmigo Earmark — A Sole-Source AI Tutoring Contract Cut by 95% After Evidence Pushback

Sen. Mike Lee (R-New Hanover) introduced a state budget provision directing more than $10 million in recurring funding to Khan Academy for its Khanmigo AI tutoring and teaching-assistant platform, naming Khan Academy as the sole vendor without a competitive bidding process.
Educators and AI researchers pushed back, questioning whether Khanmigo had been evaluated rigorously enough to justify state-wide funding at that scale; the criticism echoed evidence from elsewhere, including a two-year cluster-randomised trial in Tennessee that found Khanmigo access alone did not improve outcomes.
In an April 2026 interview with Chalkbeat, Khan Academy's own founder Sal Khan acknowledged Khanmigo had "not met early expectations," saying that for many students it "was a non-event" because "they just didn't use it much."
The conference budget finalised in July 2026 cut the recurring appropriation to $500,000 in one-time funding for Khanmigo licences plus a separate $2.5 million for Khan Academy partnerships with public and charter schools — a roughly 95% reduction from the original proposal.

Read the full analysis: https://ncnewsline.com/2026/07/01/new-nc-budget-keeps-khanmigo-contract-but-slashes-funding-from-10-million-to-500000/