Chegg, a publicly traded company providing academic services and online tutoring, has seen a steep decline in its share price after it disclosed the impact of ChatGPT, an artificial intelligence (AI) chatbot. Developed by OpenAI, the free AI bot quickly became a hit amongst students as it enabled them to get detailed answers to their instructions in a prompt manner. Within less than a week, over a million users had used ChatGPT.
Although Chegg saw no significant detriment to its business until March of this year when OpenAI launched GPT-4, an upgraded version of the former, Chegg CEO Dan Rosensweig was of the opinion that student’s penchant for ChatGPT was beginning to affect its new customer growth rate. With ChatGPT being free and often providing more detailed results, it would make sense for students to use the service instead of signing up for Chegg, resulting in minimal customer growth.
A study by University of Pennsylvania researchers concluded that GPT technology could contribute to the huge disruption of many jobs, particularly those in the accounting field. The ramifications of such a huge chunk of the workforce being affected suggest that this disruption is not to be taken lightly.
This has led to a huge dip in share prices for companies related to educational and AI services, with Chegg shares going down by 48.41 percent, Pearson falling by twelve and a half percent and Duolingo dropping by nine percent. As for Chegg, it is already in motion to develop a similar AI service – CheggMate – in collaboration with OpenAI. Although it has not been confirmed yet just how large the impact of CheggMate will be, Jefferies analyst Brent Thill believes there won’t be any influential exertion before next year’s fiscal.
Regarding the company mentioned in this article, Chegg is a publicly traded company founded and based in Silicon Valley that provides various academic services including guidance with writing, math assignments, and studying resources. Having become a staple destination for students in the past decade, Chegg’s downfall in the stock market began with the introduction of OpenAI’s ChatGPT.
In the article above, Dan Rosensweig is mentioned as the CEO of Chegg. Through his leadership, the company has grown in size and scope. Having been at the helm of the company since 2018, Dan has introduced various features and services to ensure Chegg remains a prominent destination for students looking for high-quality services.
