The Future of Coding Bootcamps: How AI is Reshaping the Market
For years, coding bootcamps were seen as a golden ticket into the tech industry. They offered a quick path to marketable skills and lucrative careers. More than 100 of these programs popped up across the U.S., touted as a “no-frills alternative” to traditional college degrees. However, the landscape is shifting dramatically, and the rise of artificial intelligence (AI) is forcing a fundamental reassessment of the bootcamp model.
The AI Disruption
The primary challenge facing coding bootcamps stems from the way AI is altering the tech job market itself. Tech companies are increasingly leveraging AI tools to automate tasks that were previously handled by entry-level human coders. This has led to what industry insiders now describe as “GPT monkey” roles – positions where employees primarily handle minor tasks while relying on ChatGPT, Gemini, and other AI tools for complex software writing.
This shift has created multiple headwinds for coding bootcamp providers:
Changing Employer Needs: Employers are now seeking candidates with specialized tech skills, particularly in AI and machine learning, rather than general entry-level coding abilities.
AI as an Education Provider and Bootcamp Competitor: Generative AI tools have proven to be excellent tutors and learning tools. Many individuals consider them more accessible and a much lower-cost pathway to acquire basic coding skills, making the traditional bootcamp model less appealing.
Reduced Entry-Level Demand: The automation of basic coding tasks using AI has significantly reduced the demand for entry-level tech employees, directly impacting the primary market that bootcamps serve.
2U’s Market Exit: A Telling Case Study
The struggles of 2U, a major player in the bootcamp market, is a perfect illustration of these headwinds. In 2019 2U acquired Trilogy Education for $750 million. Trilogy is an education company that helps set up and run short-term coding programs at university extension schools. Over the next several years, 2U partnered with 50 colleges and universities to set up and run their coding bootcamps. However, in December 2024, 2U made what industry observers called a “bombshell announcement” to exit the bootcamp sector entirely. It’s important to note that they didn’t sell their bootcamp business – they simply shut it down. This suggests their $750 million investment held little or no market value.
This decision followed a stark 23.3% revenue decline in 2U’s Alternative Credential Segment, driven largely by a 40% drop in bootcamp enrollment. As noted by education sector investment banker, Rich Jackim, the business line “was not worth selling, due to either a lack of buyer interest, or a realization that the market value that could be realized in a sale would not be worth the cost and effort to sell it, or possibly both.”
Instead of selling, 2U will write off their $750 million investment in Trilogy and pivot to offering other kinds of microcredentials through edX.org, which it bought for $800 million in 2021.
The same situation has occurred to dozens of smaller coding bootcamps across the country, including CodeUp in Austin, TX, that was forced to close in January 2024 because enrollment slowed to the point where it could no longer cover its operating costs. This highly respected bootcamp was forced to close in the middle of an investment banking process to sell the business.
The Reality on the Ground
The challenges extend beyond just market dynamics. A telling example comes from an EdSurge podcast hosted by Jeff Young that interviewed, Tim Lum, a returning adult student who attempted the bootcamp route in Honolulu. His experience highlighted common issues with the model: chaotic classroom environments due to widely varying skill levels among students, and the reality that many students essentially teach themselves using the bootcamp’s curriculum. Lum ultimately decided that a traditional computer science degree was necessary to achieve his career goals, enrolling in a community college before transferring to a four-year university.
Market Implications and Future Opportunities
For boot camp owners and potential buyers, these developments have profound implications:
Reduced Business Value: Traditional bootcamp businesses face significant downward pressure on valuations.
Fewer Buyers: The lower enrollment numbers and existential risk from AI has already results in fewer buyers willing to enter the coding bootcamp sector.
Lower Value for Students: The value proposition for students is weakening as AI tools provide alternative learning paths and entry-level coding positions become more automated.
Evolution Required: Success in this coding bootcamp sector will require owners to make significant changes in the traditional bootcamp model.
However, opportunities exist for bootcamps that are willing to evolve:
Specialized Training: Programs focusing on advanced skills in AI, machine learning, and emerging technologies that resist automation could find sustainable market niches.
Microcredential Integration: Developing shorter, more focused programs that complement rather than replace traditional education might provide a viable path forward. This could include programs that result in an industry recognize credential or certification, rather than a certificate of completion.
Industry Partnerships: Closer integration with universities or tech companies could help create more valuable and recognized credentials.
Conclusion
The impact of AI on coding bootcamps marks a significant inflection point in the tech education market. While the traditional bootcamp model faces existential challenges, the underlying need for tech education remains strong – it’s the nature of that education that’s changing. For investors and bootcamp owners, success will require carefully analyzing these market shifts and adapting to a landscape where specialized skills and AI literacy increasingly dominate the value proposition.
The days of coding bootcamps as a quick alternative to traditional education may be waning, but opportunities remain for those that are willing to evolve their offerings to meet the changing needs of employers and students.
If you are interested in our other articles about coding bootcamps, please read Coding Bootcamp Acquisitions: 2014 to 2022.
About the Author and Jackim Woods & Co.
Rich Jackim is an education industry investment banker, education industry entrepreneur, and former mergers and acquisitions attorney.
For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in the education sector.
Rich also founded a successful training and certification company called the Exit Planning Institute, which he sold to a private equity group in 2012.
Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.
Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned schools, colleges, and EdTech companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.
If you own an education-related business and are interested in exploring your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.
