Edtech Chegg Tumbles as ChatGPT Threat Prompts Revenue Warning

What's the cost of students using ChatGPT for homework? For U.S. education services provider Chegg, it could be nearly $1 billion in market valuation. From a report: Chegg signaled the rising popularity of viral chatbot ChatGPT was pressuring its subscriber growth and prompted it to suspend its full-year outlook, sending shares of the company 47% lower in early trading on Tuesday. "Since March, we saw a significant spike in student interest in ChatGPT. We now believe it's having an impact on our new customer growth rate," said Chegg CEO Dan Rosensweig. There are fears Chegg's core business could become extinct as consumers experiment with free artificial intelligence (AI) tools, said analyst Brent Thill at Jefferies, which downgraded the stock to "hold." Last month, the Santa Clara, California-based firm said it would launch ChatGPT's AI powered CheggMate, a study aide tailored to students' needs, at a time educators were grappling with the consequences of the homework drafting chatbot.

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