Pearson's chief executive has firmly dismissed shareholder anxieties that the company's educational services could be displaced by the rapid proliferation of artificial intelligence chatbots. Earlier this year, the FTSE 100-listed education giant experienced significant share price volatility alongside other London-based data and software stocks, including Sage and Relx, as investors grew nervous about general-purpose AI tools potentially replacing specialized programs.
CEO Confident in Human-Led Services
In an exclusive interview with City AM, Pearson CEO Omar Abbosh expressed understanding for investor concerns but remained adamant about the company's resilience. "I have empathy with these investors who are trying to see the wood for the trees given the sheer rate of AI innovation," Abbosh stated. He emphasized that approximately 80 percent of Pearson's profits originate from assessments and virtual schools, which he described as "very operationally complex physical and digital services" that are fundamentally human-led and require exceptional operational standards.
Technology Background Informs Perspective
Drawing on his extensive technology background, Abbosh explained, "I did 35 years of tech before I came to Pearson – you cannot do that with an AI plugin." He detailed how Pearson strategically incorporates AI advancements while grounding them in the company's proprietary datasets. "Every time an AI lab puts out some amazing new AI feature which I love, we use those features and we ground those models in our proprietary datasets," Abbosh revealed.
The CEO further asserted that Pearson's products demonstrate superior efficacy in learner outcomes compared to traditional approaches. He cautioned that relying solely on AI for educational queries could actually hinder academic performance, a claim Pearson can substantiate with evidence.
Activist Investors Increase Pressure
Recent months have seen activist investors accumulating substantial stakes in Pearson, intensifying pressure on the company to solidify its long-term technology strategy or potentially face shareholder action. Abbosh responded optimistically to this development, telling City AM, "I'm delighted to see smart money increase its position in our register because clearly they're seeing the upside risk in Pearson is way higher than any downside risk."
Financial Outlook and Performance
Pearson has projected low to mid-single digit sales growth for 2026, with anticipated profits ranging between £640 million and £650 million. This forecast is primarily driven by robust expansion in the virtual learning division. The company reported a profit decline in 2025, attributed to an £87 million impairment charge resulting from the integration of various course platforms.
Pearson shares remained largely stable during Friday morning trading but have decreased by approximately six percent since the beginning of the year. Abbosh characterized the growth guidance as "a sign of our confidence in our business model and confidence for the demand that we're seeing in the market," reinforcing his positive outlook despite ongoing investor apprehensions about artificial intelligence's disruptive potential in the education sector.
