Online learning giants were sent into a tailspin following the news of ChatGPT which is an AI chatbot. Silicon Valley-based Chegg is an ed tech company that provides help with online homework, textbooks and course materials, and Monday their CEO announced that the emergence of AI-generated chatbots had adversely affected the company’s revenues.
CEO Dan Rosensweig reported that during the first part of the year, there was no unusual decrease in the new account growth, and the new sign-ups did not indicate an impending issue. However, since the month of March, there was suddenly a huge spike in student attention towards ChatGPT and the company now believes that it has had an effect on the slow down of their new customer growth.
Chegg saw their sales drop by 7% from last year’s and the subscription to their services fell by 5%. This news sent shock waves through the ed tech sector, forcing the company’s share price to drop nearly 50%. Pearson, a UK-based company, also saw a 15% drop in their London share price.
The CEO insists that the shift in focus of the students towards ChatGPT was only a temporary blip, and those who loyally followed the company’s services, that is, using their products and services, are not utilizing ChatGPT and they are stayed with Chegg.
Rosensweig also added that their own AI-driven chatbot, “CheggMate”, is based on GPT-4, a technology developed by OpenAI and backed by Microsoft, to tailor to the students’ needs. Previously, the company was also accused of helping students to cheat, especially during the COVID-19 pandemic, when the tests were taken online and away from the teacher’s supervision.
The use of AI-driven technology has increased in economies, but this news brings the first example of what the technology is capable of and its impacts on a company’s finances. Researchers believe that companies which do not require specialist traits in its employees, such as call centers and chegg, are the most vulnerable to be replaced by AI-driven chatbots.
Vishal Gupta, adjunct professor at USC Marshall School of Business suggests that AI will initially only be applied to tasks that are relatively low risk, until the full capability of the technology is clear. With the news on Chegg and similar companies, it is clear that AI chatbots are posing a threat to their business.
