I also teach in a university. There are two concepts: teaching with the AI, and teaching against it. At first, I want my students to gain a strong grasp of the basics, so I teach “against” it - warnings for cheating, etc. This semester, I’m also teaching “with” it. Write an algorithm that finds the cheapest way to build roads to every one of a set of cities, given costs for each street segment. I tell them to test it. Test it well. Then analyze its running time. What technique did it pick? What are the problems with this technique? Are there any others? What input would cause it to break? If I assumed (some different condition), would this change the answer?
Students today will be practitioners tomorrow, and those that know how to work with AI will be more effective than those who do not.