Chegg Shares Plummet as it Admits Threat from ChatGPT - A Real-life Study

The Story:

Once upon a time, there was a student named Jane who was struggling with her Chemistry assignment. She tried to search for solutions on Chegg but found them either too expensive or not available at the moment. Frustrated and short on time, she turned to ChatGPT, an AI-powered chatbot for academic help. Within minutes, she received a step-by-step solution to her problem, for free!

The Real-life Examples:

Jane's story might be fictional, but the competition between Chegg and ChatGPT is very real. According to recent reports, Chegg's shares plummeted by 12% as it admits the growing threat from ChatGPT and other similar platforms. Chegg has been a leading provider of textbook rentals and academic assistance to students around the globe. However, the emergence of new technologies such as AI-powered chatbots and online study groups is disrupting traditional models of education and study support.

Another example is Quizlet, a peer-to-peer study platform that offers free flashcards and quizzes to students. Quizlet has over 50 million active users and has raised $62 million in funding so far.

To address this changing landscape, Chegg has recently invested in AI and machine learning capabilities, and acquired Mathway, an AI-powered math solver app, to expand its services to STEM students.

However, the question remains whether these efforts will be enough to keep up with the fast-paced innovations in the edtech industry.

The Critical Comments:

1. The rise of AI-powered chatbots and online study groups is disrupting traditional models of education and study support, and companies like Chegg need to adapt quickly to remain competitive.
2. While Chegg's investment in AI and acquisition of Mathway is a step in the right direction, it remains to be seen whether it will be enough to keep up with the ever-changing edtech industry.
3. Students are increasingly looking for affordable and accessible solutions to their academic problems, and companies that fail to meet these needs may risk losing their market share.