Can Brick-and-Mortar Universities Be Replaced by AI?

Sanjeev Sanyal wrote a post on X suggesting that the scope of AI in education should be widened. I agree that AI can effectively cover most of an undergraduate curriculum. In my earlier post, I mentioned how AI can provide answers to known questions very well. But can AI replace brick-and-mortar universities? My answer is: never.

Why? I use the term “clubhouse effect” to explain this paradox. To understand this, let's consider why a house in Hiranandani Gardens, Powai, fetches more than a 20% premium compared to a house of similar size in a neighboring housing society. One of the main reasons is the clubhouse they provide.
 
People go to a clubhouse for networking. You can get a business deal in a clubhouse. An educational institution effectively works as a clubhouse. Surely, Harvard University provides a superior education compared to an average university, but that is not why Harvard charges $100,000 per year. In any case, most of its courses are freely available online.
 
The same goes for IITs. Most courses are freely available online. The perceived reputation and the alumni network are the real values one gets. The next question, of course, is whether building a university is the only way to bring people together. Of course not. Sanjeev Sanyal proposes building a bhajan mandali, and I agree.
 
Let's conduct a thought experiment. Suppose we build a bhajan mandali for 1,000 students. They are taught by AI teachers without a human teacher present. In the evening, they do bhajan together. We need to employ some humans to provide security, to provide food, and perhaps to provide spiritual guidance. They will eventually form a community and support each other.
 
Of course, this will not happen due to government interference.