Chegg Is On Its Last Legs After ChatGPT Sent Its Stock Down 99%

If reasoning astir Chegg gives you PTSD to the days erstwhile you were successful school, I mightiness person immoderate bully quality for you: The institution known for textbook rentals and homework assistance is moving connected fumes. Chegg’s banal is down a whopping 99% since its highs successful 2021, erasing $14.5 cardinal successful value, and the institution has mislaid fractional a cardinal paid subscribers. After gross keeps dropping 4th aft quarter, determination are doubts it volition beryllium capable to proceed paying its debts.

Chegg should beryllium acquainted to astir radical who person been to assemblage successful caller years. It started retired successful the 2000s renting retired textbooks and aboriginal expanded into online survey guides, and yet into a level with pre-written answers to communal homework questions.

Unfortunately, the motorboat of ChatGPT each but annihilated Chegg’s full concern model. The institution for years paid thousands of contractors to constitute answers to questions crossed each large subject, which is rather a labour intensive process—and there’s nary warrant they volition adjacent person the reply to your question. As we know, ChatGPT connected the different manus has ingested beauteous overmuch the full internet, and has apt seen immoderate past question you mightiness propulsion astatine it.

As the Wall Street Journal reports, the motorboat of ChatGPT saw students driblet their $20 a period Chegg subscriptions successful favour of the chatbot:

Though Chegg has built its ain AI products, the institution is struggling to person customers and investors it inactive has worth successful a marketplace upended by ChatGPT.

“It’s free, it’s instant, and you don’t truly person to interest if the occupation is determination oregon not,” Jonah Tang, an M.B.A. campaigner astatine Point Loma Nazarene University successful San Diego, said of the advantages of utilizing ChatGPT for homework assistance implicit Chegg.

A survey of assemblage students by concern slope Needham recovered 30% intended to usage Chegg this semester, down from 38% successful the spring, and 62% planned to usage ChatGPT, up from 43%.

It’s unclear what Chegg tin truly bash to stem the bleeding astatine this point. The institution laid disconnected 441 employees implicit the summer, a 4th of its workforce. It’s trying to people what the caller CEO describes arsenic “curious learners” by offering much broad AI-assisted answers arsenic good arsenic unrecorded counseling.

What’s possibly astir bittersweet is that, according to the Journal, employees really asked for resources successful 2022 to make AI tools for automating answers. The institution saw a immense boost successful request during the pandemic erstwhile learning erstwhile virtual and the institution needed to nutrient answers for questions fast.

Chegg’s leaders denied the petition to commencement gathering AI tools until ChatGPT’s release, but adjacent past immoderate internally weren’t disquieted due to the fact that of the chatbot’s propensity to marque up incorrect answers.

But arsenic with a instrumentality similar Wikipedia, it’s wide that students are consenting to judge immoderate hazard due to the fact that of the convenience. Students are told not to spot Wikipedia, but astir usage it anyhow and caput to the references conception to drawback citations. Of course, chatbots similar ChatGPT person nary conception of a taxable similar math, they’re conscionable guessing the words indispensable to marque a condemnation that sounds right. They volition instrumentality answers that look deceptively close but aren’t. It’s similar having a calculator that’s close 50% of the time. For different subjects similar history, chatbots are somewhat better, but answers should beryllium double-checked.

Maybe Chegg could enactment harder to assistance radical recognize this? It seems similar astir students don’t attraction though, and the timepiece is moving retired for Chegg.