Investors Worry Chegg Could Be Schooled By ChatGPT’s A+ Technology
For years, Chegg has been a reliable source of homework help for millions of students around the world. In fact, it has estimated a huge market for its services with 100 million students globally, 8.1 million of whom subscribed in 2022. However, despite the many students who rely on its homework-helping services, the company's stock was down by roughly 50% last week due to the CEO's statement that ChatGPT could have an impact on its new customer growth.
Chegg's drop was so significant that analysts had to chop price targets, and the news also affected other edtech stocks. The company's CEO, Dan Rosensweig, believes that Chegg's drop was "extraordinarily overblown." Tech firms are adopting AI tools like ChatGPT and leveraging proprietary data to create new revenue streams. Chegg's CEO is now focusing on a tool called CheggMate, which will combine ChatGPT’s technology with Chegg’s library to create a super comp-tutor.
The edtech industry is worried about the rise of free, improving chatbots that could replace vetted academic data. Chegg's unknown is whether its academic data will be enough to withstand the competition from these emerging technologies.
While Chegg aims to embrace AI tools, it has no plans to adopt NFTs anytime soon. The company's CEO, Rosensweig, sees NFTs as not real, important, or threatening.
The world is rapidly changing, and Chegg is facing increasing competition from emerging technologies like ChatGPT. However, its CEO remains optimistic and believes that its CheggMate tool will help the company stay ahead in the edtech industry.
