In 2013, Harvard Business School professor Clayton Christensen made a dramatic prediction: “In 10 to 15 years, 50 percent of colleges and universities will be bankrupt.” Grounded in his celebrated theory of disruptive innovation, Christensen imagined a future where online learning would gradually displace traditional institutions. Supported by co-author Michael Horn and the Clayton Christensen Institute, this vision rested on a core belief that technological innovation would creep in from the margins, slowly forcing the higher education sector to adapt or die.
But 2025 has not brought the slow-motion disruption Christensen foresaw. It has delivered something far more devastating: a collapse so rapid and total that it renders the theory itself obsolete. What we are witnessing is not disruptive innovation—it is educational annihilation. It is, in effect, a Hiroshima moment for higher education, where the landscape has been scorched so thoroughly by artificial intelligence that there is no longer a recognizable battlefield.
Christensen’s model depended on institutions surviving long enough to be gradually disrupted. But AI has bypassed that timeline and obliterated the very foundations of traditional education. Instead of online learning rising up through the ranks, we now have a student body increasingly dependent on generative AI for every aspect of their academic experience. One student recently summed it up by saying, “College is just how well I can use ChatGPT at this point.” That statement isn’t an exaggeration—it’s the new norm.
Universities aren’t being challenged in slow increments. They are being wiped out. Since 2020, at least 80 nonprofit or public colleges have closed, merged, or announced closures. The Federal Reserve Bank of Philadelphia forecasts as many as 80 more colleges could collapse in 2025 alone. Even flagship institutions like the University of Arizona are reporting deficits in the hundreds of millions, while West Virginia University has undertaken massive cuts to academic programs and faculty. DePaul University is projecting a $56 million shortfall. The collapse is system-wide, not isolated to struggling outliers.
The impact extends beyond institutional budgets. It touches the core of what education is supposed to be. The widespread use of AI by students to complete their coursework has created an invisible yet devastating consequence: cultural debt. This is not simply a matter of plagiarism or cheating. It’s a loss of intellectual development, critical thinking, and meaningful engagement. We are producing graduates who may hold credentials, but lack the capacity for independent analysis. We are entering a world where degrees are increasingly decoupled from knowledge, and where assessment is rapidly losing all credibility.
Christensen never accounted for the possibility that a technology would be so powerful, so universally adopted, that it would destroy the institutional context his theory depended on. His disruption model assumed time—time for adaptation, time for hybrid models to form, time for competition to play out in a recognizable marketplace. But AI has left no time. It has created a moonscape, a terrain so decimated that rebuilding on it seems nearly impossible. There is no “University 2.0” waiting in the wings. There is only confusion, cost-cutting, and chaos.
The metaphor of Hiroshima is not used lightly. Just as nuclear weapons rendered conventional military strategy irrelevant, AI has rendered conventional education strategy meaningless. This isn’t Schumpeterian creative destruction—it’s creative annihilation. Christensen and Horn imagined a reformed and responsive university sector. What we have instead is a hollowed-out system where students learn to game the machine, faculty burn out trying to preserve integrity, and administrators chase tech partnerships while gutting their academic cores.
The movie is already being made. It isn’t a Hollywood fantasy. It’s the lived reality of students wondering why they’re still paying five figures for an education they can automate. It’s the story of adjuncts discarded in cost-cutting purges. It’s the grim resignation of faculty who know their lectures are being fed into the same machine that replaces them. And it’s the slow recognition among lawmakers and funders that the 200-year-old institution of American higher education may not survive the decade.
Christensen’s theory pointed a loaded gun at higher education. AI pulled the trigger. What comes next is unclear, but it won’t be disruption in the old sense. It will be a reckoning with what happens when the ground beneath you no longer exists. The educational Hiroshima has already happened. Now we must decide whether to rebuild—or retreat into the ruins.
Sources
Clayton Christensen and Henry Eyring, The Innovative University: Changing the DNA of Higher Education from the Inside Out, Jossey-Bass, 2011
Christensen Institute: https://www.christenseninstitute.org/theory/disruptive-innovation/
Michael B. Horn, “Bringing Disruptive Innovations to Education,” 2024 — https://michaelbhorn.com
Business Insider, “Half of US Colleges Will Be Bankrupt,” 2013 — https://www.businessinsider.com/clay-christensen-higher-education-on-the-edge-2013-2
Inside Higher Ed, “University of Arizona's $240 Million Deficit,” 2024 — https://www.insidehighered.com
Inside Higher Ed, “WVU Academic Cuts,” 2023 — https://www.insidehighered.com/news/2023/09/19/wvu-begins-largest-academic-purge-its-history
Federal Reserve Bank of Philadelphia, Higher Education Risk Index, 2024
BestColleges, “Major College Closures Since 2020” — https://www.bestcolleges.com/research/closed-colleges-list-statistics-major-closures/
AACU Research on AI in Higher Ed — https://www.aacu.org/research/leading-through-disruption
Marketing AI Institute, “AI Cheating in Higher Ed” — https://www.marketingaiinstitute.com/blog/ai-cheating-schools-universities
CNBC, “College Closures Could Jump Amid Financial Challenges,” 2024 — https://www.cnbc.com/2024/12/11/college-closures-could-jump-amid-financial-challenges-fed-research.html
SR.ITHAKA.org, “Making AI Generative for Higher Education” — https://sr.ithaka.org/publications/making-ai-generative-for-higher-education/
The Bulletin of the Atomic Scientists, “Today’s AI Threat More Like Nuclear Winter Than Nuclear War,” 2024 — https://thebulletin.org/2024/02/todays-ai-threat-more-like-nuclear-winter-than-nuclear-war/
Hackeducation.com, “The Education Apocalypse,” 2013 — http://hackeducation.com/2013/11/07/the-education-apocalypse
NBER Working Paper No. 33867, “Generative AI and Labor Market Impact,” 2024 — https://www.nber.org/papers/w33867
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