Education Company Chegg’s Stock Cut in Half Over ChatGPT Use
Trends
May 2, 2023
Another victim of AI: Education company Chegg’s (NYSE:CHGG) stock was cut in half yesterday after saying ChatGPT was impacting its growth.
“Chegging” turns into “ChatGPTing”
COVID accelerated Chegg’s growth as students used its tools to answer college course questions. But colleges accused Chegg of helping students cheat — who increasingly used it for online exams and quizzes.
Karma’s a beach: And now, the company that helped students cheat — is being cheated from its future.
- Chegg reported a 7% sales decline and forecasted sales to come in 10% below expectations this coming quarter.
- Its CEO said generative AI would impact society “at a faster pace than people are used to.”
Education was one of the early sectors predicted to be impacted by AI. Yesterday, other education stocks, including Udemy, Coursera and Pearson, dropped following Chegg’s results.
Embracing ChatGPT: Last month, Chegg launched ChatGPT-infused CheggMate. But Citigroup analyst said ChatGPT would replicate the service — while course material creator Pearson would be impacted in ways yet to be known (FT).
