Chegg, online education platform, casualty of ChatGPT

The Journal reports on Chegg, a once dominant online education platform for homework help, which has seen its stock plunge 99% from 2021 highs as students flock to ChatGPT for immediate and, better, free answers to cheat or, perhaps, better help them learn. Since ChatGPT’s launch, Chegg has lost more than half a million subscribers and vaporized $14.5 billion in market value.

Former CEO Dan Rosensweig attempted to combat ChatGPT's rise by launching "Cheggmate," an AI-driven tool in collaboration with OpenAI. However, the initiative faltered, and Rosensweig stepped down in June, succeeded by longtime Chegg executive Nathan Schultz. Schultz has pivoted the company’s strategy, cutting nearly a quarter of the workforce and focusing on offering enhanced resources for “serious students.” Generally, appending the "serious" qualifier to a previously greenfield customer base will not encourage further investment.

While Chegg’s AI initiatives have reduced costs, revenue continued to decline as students remain unconvinced by the platform’s new offerings. A recent survey shows a continued shift to ChatGPT, with 62% of college students preferring the chatbot over Chegg’s services.