Chegg’s last hope is what killed them: Artificial Intelligence

WEB DESK: The educational tech company Chegg has lost 99 per cent of its stock since it reached a valuation of $14.5 billion in 2021 during the pandemic.

AN AI KILLER

Chegg, a site from which students could get assistance with their coursework through the business’ thousands of contractors who were paid to tackle a range of subjects, became obsolete in 2022 when the generative artificial intelligence chatbot ChatGPT was released.

Over half a million subscribers left Chegg since the launch of ChatGPT, as the alternative provided a free and quicker solution to the needs of most students. Instead of searching the Chegg database for possible answers to coursework, a student can easily ask ChatGPT to provide a step by step answer.

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AN AI FUTURE

In order to combat the declining stock price, Chegg is moving towards AI learning content itself. They began with CheggMate, an AI conversational learning companion that uses OpenAI’s GPT-4 model, which was announced in April of 2023 and had a limited release a month later.

In June of 2024, an interview with the newly appointed CEO Nathan Schultz revealed that Chegg is continuing to develop an AI-powered learning assistant.

“We envision that Chegg’s platform will allow students to learn through guided back-and-forth conversations that deepen understanding and adapt to students evolving knowledge and skills,” said Schultz. He went on to describe how students would be able to receive suggested question prompts, learn at optimal times in the day, be recommended additional practice, and be encouraged ot build learning resilience. Schultz explained that the AI learning companion could accomplish such feats by generating “practice tests, study guides and multi-modal instructional content that is personalised to the specific student need.”

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Chegg’s future largely depends on whether their AI ventures are successful or not, as their latest quarterly earnings revealed that they currently have 3.8 million subscribers, a decrease of nearly 1.5 million since their Q2 2022 high of 5.27 million subscribers.

Their third quarter total net revenues were $136.6 million, a decrease of 13 per cent year-over-year.