My thoughts on this:
First off I'd rather not move to Canvas but see the pros and cons. Pros seem to be $$ savings and student familiarity brought on from universal design (Canvas is already the designated LMS for public schools and community colleges). Cons involve the level of distrust that I have in classroom freedom, i.e., now it would seem to be infinitely easier for administration to access every class Canvas site than previously.
As for the AI element here there is no doubt that assessment must be redesigned. We're caught to a degree in a free market worldview that is increasingly thrust upon education since so often now at the system level the student is considered to be no more than a consumer and the university simply the provider of a product that consumer is purchasing. How does assessment work then in such an arrangement when literally "the customer is always right"? There's a disconnect there that can be too readily/easily manipulated from so many angles of approach -- students, teachers, and administrators can each 'game' that sort of set-up with little genuine attention paid to whether or not education or learning is going on. I guess, thirdly, this specific AI "program" seems like it could be turned toward learning rather than "getting an A" but that would require the fundamentals of the consumer/provider situation to change direction from its current trajectory.