ChatGPT Threat Sparks 38% Selloff in Homework-Help Firm Chegg
- Chegg’s stock dives after CEO’s comments and weak forecast
- The US edtech firm says it’s struggling with new user growth
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Chegg Inc. plummeted 42% after warning that the ChatGPT tool is threatening growth of its homework-help services, one of the most notable market reactions yet to signs that generative AI is upending industries.
The company, which offers online guidance for students taking tests and writing essays, also gave revenue and profit forecasts for the current quarter that fell well short of analysts’ estimates. Chegg makes much of its money from subscriptions, which start at $15.95 a month, a revenue source that’s in peril if students see AI chatbots as an alternative to paying.