AI gold rush is driving students to put college on hold for startup bets, Stanford professor says

• A Stanford professor said the AI boom is encouraging some students to pause their studies to pursue early-stage startups.
• Nicholas Bloom said the trend echoes the early 2000s as more undergrads join AI ventures.
• Students see startups as reversible bets, not career detours, he added.

"It feels like a return to the early 2000s."

That's how Nicholas Bloom, a professor of economics at Stanford University, described what he sees as a growing trend on campus: students pausing their degrees to join early-stage AI startups.

Bloom said he knows at least five students who have put their studies on hold to chase opportunities in artificial intelligence — a move that echoes the dot-com boom at the turn of the century, when young talent flooded into internet startups.

While this is just a handful of students among the couple of hundred that he teaches, this movement is significantly higher than in prior years, he said. Stanford University said it does not track why students take leaves of absence and does not have data on this trend.

"This dropout to startups was not something I had seen before," Bloom said. "AI is so new that undergrads can potentially be at the cutting edge of this, and the valuations are so high that it's worth it for them to pause even for an early-stage idea."

Still, students do have the option to return to their studies if it doesn't work out.

"It feels for students like pulling on a lottery ticket — if you win, it's amazing, and if you lose, you've spent two years in startup life and can return to Stanford."

New career paths

The trend reflects a broader shift in how students are thinking about careers in the age of AI.

Rather than following conventional paths through internships, college, and corporate roles, some are skipping ahead to build or join AI startups — sometimes pausing or dropping out of school entirely, as Business Insider previously reported.

Part of the shift may be driven by growing uncertainty around entry-level work. AI and layoffs across tech and corporate sectors are already prompting students to switch majors and reshaping the kinds of jobs new graduates typically take, with companies automating routine white-collar tasks and increasingly expecting hires to arrive job-ready.

The unemployment rate for recent college graduates as of December climbed to its highest level since 2021, adding to concerns about job stability.

'This feels much bigger and more revolutionary than anything I've seen'

Bloom said the intensity of the AI moment stands out even in Silicon Valley, where hype cycles are the norm.

"In my 20 years working at Stanford and living in the Bay Area, I've never seen a trend so smothering," he said. "AI is in about every fourth sentence."

That saturation is fueling a sense of urgency and a fear of missing out among students and founders alike.

Bloom likened the current moment to a modern-day gold rush, with talent pouring into AI in hopes of striking it big.

"This feels much bigger and more revolutionary than anything I've seen," he said.

The shift could have lasting implications for universities and employers, as top students increasingly weigh whether to stay in school or take a chance on startups.

For now, Bloom said, the calculus is simple: in a market defined by rapid change and outsized rewards, stepping away from a degree may feel more like a strategic bet.

"AI is like a twist on that old [Robert] Lucas quote," he said, referring to the Nobel Prize-winning economist's 1988 paper on economic growth. "Once you start thinking about AI, it's hard to think about anything else."

Are you a college student who put school on pause to join an AI firm? Reach out to this reporter at tspirlet@businessinsider.com