Chegg, an education company criticized for helping students cheat, has seen its stock prices plunge recently amidst the rising popularity of ChatGPT, a chatbot powered by Artificial Intelligence (AI) technology. Chegg Study, the company’s primary revenue source, has been met with criticism and backlash due to its users’ ability to quickly cheat their way through courses and exams.
ChatGPT stands to threaten Chegg’s business model by offering students a way to finish last-minute work without doing any of it themselves, offering a more affordable tool than Chegg’s answer database. Additionally, ChatGPT provides support for more open-ended questions, studying aides and study tools- all at no cost.
Chegg tried to stay relevant in the competition last month with their launch of CheggMate; an AI-powered tool which offers tutoring, instant feedback, and personalized learning. While customers seemed to embrace the technology, a study conducted by Business Wire revealed 85% of students preferred support from human experts. CheggMate is currently available on a waitlist and is expected to open to the general public this month.
Chegg Inc. is a multi-billion dollar educational technology company that was founded in 2005 by CEO, Dan Rosensweig. Throughout its 16 years in the educational technology industry, Chegg has acquired several prominent companies in the space, such as EasyBib, StudyBlue and Notesolution. Furthermore, in its most recent earnings report, Chegg posted an annual revenue growth of $647.9 million and its shares dipped to 42% at the close of trading yesterday.
