ChatGPT's popularity with students slices Chegg's stock nearly in half
When ChatGPT became popular, many people were concerned that ready access to AI tools could facilitate cheating among students. However, students had reliable resources for cheating long before the dawn of ChatGPT. Take Chegg, for example.
Before ChatGPT became the boogeyman, Chegg was the website that teachers warned students against and feared would enter their classrooms. In fact, many teachers banned students from using Chegg altogether. Sound familiar?
Also: Universities that ban ChatGPT may be hurting their own admissions, according to a study
With a Chegg subscription, students could access answers for their assignments. For some students, the homework help was worth the $14.95-per-month investment.
But why invest in Chegg when you can get homework help for free from ChatGPT? That's the exact question Chegg CEO Dan Rosensweig, investors, and students are asking.
On an earnings call Monday, Rosensweig mentioned that ChatGPT was having a negative impact on Chegg's growth rate, making it harder for the company to get new subscribers.
Also: How to use ChatGPT to write an essay
That statement seems to have spooked investors, with Chegg stocks plunging nearly 50% ahead of the market open Tuesday.
Other education platforms such as Pearson and Duolingo faced similar fates with smaller, yet significant share drops.
Chegg has an AI project of its own in the works. CheggMate will combine the power of GPT-4 with Chegg's content to create personalized learning experiences for users on the platform. Perhaps harnessing the power of ChatGPT will be the push Chegg needs to attract more subscribers to its platform.