Chegg, an online education company, experienced pangs of volatility in its stock value recently which was attributed to the potential impact of OpenAI’s ChatGPT, the popular artificial intelligence chatbot, on its business. Concerns surrounding this matter were so pervasive that the company declined to provide annual guidance. On Tuesday, Chegg’s stock value plummeted almost 50%, before recovering some of the losses with a 17% rebound on Wednesday.
Dan Rosensweig, Chegg’s CEO, insisted that the company’s stock crash was “extraordinarily overblown” amidst the uncertainties of the impact of AI on the company’s financials. In support of this statement, Rosensweig highlighted the fact that Chegg maintained a consistent stream of free cash flow, earnings, and was also in possession of more than enough cash to pay off its debt.
In May, Chegg plans to launch CheggMate, an OpenAI powered AI platform. This platform will utilize GPT-4 in combination with Chegg’s massive asset of academic data, potentially transforming the company for the better. At present, it is too soon to make assumptions about the success of CheggMate; questions about pricing models, AI related expenses, and competitive barriers are left unanswered.
Analysts from Piper Sandler have downgraded their price targets for the stock from $17 to $11. Investors also have to bear in mind that the stock value of Chegg has nosedived from its peak at $113 in February 2021 by a whopping 90%.
Dan Rosensweig is the Chief Executive Officer at Chegg Inc., a publicly-traded American education technology company which offers online tutoring, educational materials and digital textbooks. Before joining Chegg, Dan served as President and COO of Yahoo, CEO and Founder of Ask.com, COO of Vivendi Universal Net USA, and an executive at AOL/Netscape Communications. He currently serves as a board member of The Zebra, a tech start-up, and Moda Operandi, a luxury fashion site.
Furthermore, OpenAI is an artificial intelligence research laboratory based out of San Francisco, California. The company was founded in 2015 by Elon Musk, Sam Altman, Greg Brockman, Adam D’Angelo, and others. OpenAI develops artificial general intelligence (AGI) and its mission is to ensure AGI is created safely, responsibly, and benefits society at large. OpenAI’s chatbot, ChatGPT, is a platform that leverages transformers and deep learning technologies in order to simulate human conversation.
