Microsoft and AFT Sign Legally Binding Deal to Keep School Data Out of AI Training

Microsoft and the American Federation of Teachers (AFT) have reached a legally binding agreement that establishes privacy and safety protections for AI use in schools. The deal commits Microsoft not to use teacher or student data to train AI models, with limited exceptions for "narrow safety and security" scenarios.

Under the agreement, Microsoft is also barred from tracking students, and its AI products cannot make decisions in schools without human oversight. The company is additionally required to be transparent with educators and parents about how its tools work.

AFT, the second-largest teachers union in the U.S., described the agreement as a "first of its kind" effort to fill gaps left by the lack of federal AI guardrails. AFT President Randi Weingarten said the union had forged an "iron-clad privacy agreement with real teeth," adding that anything less than legally enforceable provisions would be a wish list. Microsoft will be liable for breach of contract if it violates the terms.

The protections will become available to school districts on November 1, 2026. The agreement follows months of negotiations, and AFT is currently in active talks with OpenAI and Anthropic to secure similar arrangements.

The deal comes as U.S. cities tighten AI restrictions in education. New York City recently announced a one-year moratorium on the technology for students up to eighth grade, while Los Angeles imposed a one-year ban for all public school students.