Generative AI Claims Its First Victim: The EdTech Firm Chegg

I recently came across some shocking news that claimed that the EdTech company Chegg has seen a significant drop in share prices after its CEO, Dan Rosensweig, admitted that OpenAI's viral chatbot, ChatGPT, had rendered its business obsolete. Chegg, founded in 2005, is a technology firm providing homework help services and textbook rentals. The company has been affected by recent advances in AI, as more students turn to ChatGPT for studying and learning, with a "significant spike" in interest during March of this year.

Since the beginning of 2023, Chegg's stock price has fallen 64.3%. However, despite this, the company still beat revenue and earnings estimates for Q1 2023. The emergence of generative AI will impact both society and business, positively and negatively, at a faster pace than people are accustomed to, says Rosensweig. There are concerns that this technology will replace human jobs and services, particularly those that are mundane and repetitive. Around 18% of work globally could be automated by AI, according to a March report from Goldman Sachs.

Generative AI and its growing influence

Tech companies are now competing in the field of generative AI, which has the capability to create various types of data such as text, images, videos, code, and simulations. Although it uses existing data as a reference, it can also produce new and unexpected output. The development of ChatGPT by OpenAI, which excels in conversation, essay writing, code creation, and even answering patient inquiries, has sparked an AI arms race, with Google releasing Bard and Twitter CEO Elon Musk planning to create a competing platform. Generative AI can also be useful in education, particularly in content creation, grammar checks, research, language learning, and homework. Nevertheless, technology is raising concerns about the potential loss of jobs, especially those that are mundane and repetitive. Goldman Sachs has stated that around 18% of work globally could be automated by AI, with more impact on developed markets than emerging ones.

Chegg CEO on the Future of Learning and AI

Dan Rosensweig, the chief executive and president of Chegg, a leading education technology company, remains optimistic about the integration of AI technology in learning. However, he emphasizes the importance of blending AI with human-based support to build trust, ensure accuracy and relevancy, and provide better learning experiences.

Geoffrey Hinton, a prominent figure in the AI community, warned of the potential negative effects of AI on jobs, but Chegg's survey found that 85% of students prefer to have human experts involved in their studies.

Despite concerns over the impact of AI on the job market, Chegg expects a promising future with a blend of AI and human-based support. The company believes it is still too early to predict the long-term effects of AI and prefers to be cautious in its forward outlook. Chegg's second-quarter revenue is expected to be lower than analysts' estimates, but the company remains committed to providing quality education through innovative technologies.?

My final thoughts

In my opinion, the information above highlights the growing impact of generative AI and its potential to disrupt traditional job markets.

While it offers significant benefits in terms of productivity and efficiency, it also raises concerns about job displacement and the need for upskilling and reskilling to remain relevant in the workforce. The integration of AI with human-based support, as suggested by Chegg, could provide a potential solution to this challenge, and it will be interesting to see how this plays out in the future. However, given the potential for unforeseen consequences, it is wise to approach the future of AI with caution and to continue monitoring its impact on various industries and sectors.

More importantly, I feel we desperately need better government intervention and laws to protect human rights and concurrent interests against adverse uses of AI.