Despite Chegg's attempts to adapt by laying off a quarter of its workforce and targeting "curious learners" with AI-assisted answers and live counseling, the company continues to struggle. Chegg's leaders had denied requests to develop AI tools for automating answers in 2022, a decision that now seems to have been a mistake. While ChatGPT does have its limitations, such as providing incorrect answers, students appear to be willing to accept some risk due to the convenience it offers.
Key takeaways:
- Chegg, a company known for textbook rentals and homework help, is struggling financially with its stock down 99% since its highs in 2021, erasing $14.5 billion in value, and losing half a million paid subscribers.
- The launch of ChatGPT, a platform with pre-written answers to common homework questions, has significantly impacted Chegg's business model.
- Despite Chegg's attempts to offer more comprehensive AI-assisted answers and live counseling, a survey found that 62% of college students planned to use ChatGPT, up from 43%.
- Chegg's leadership initially denied requests to develop AI tools for automating answers, a decision that may have contributed to the company's current struggles.