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This action research study explores high school students’ perceptions of artificial intelligence (AI) after a two-week AI literacy unit. With minimal district policy guiding AI use, the study examined how structured, inquiry-based exploration affects students' understanding of AI's role in learning and ethical considerations. The unit guided students through research, peer collaboration, tool evaluation, and reflection to engage with generative AI platforms. Findings revealed that guided exploration significantly expanded students’ understanding of how AI can support learning, shifting their perceptions toward more purposeful and academic integration. Students overwhelmingly advocated for responsible use policies and instructional support over bans. The study highlights the value of embedding AI education into curriculum to promote critical thinking, ethical decision-making, and student engagement.