If thinking about Chegg gives you PTSD from your school days, I may have some good news for you: The company known for textbook rentals and homework help is operating at steam. Chegg’s stock has fallen 99% since its 2021 highs, wiping out $14.5 billion in value, and the company has lost half a million paying subscribers. As revenues continue to decline quarter after quarter, doubts remain about its ability to continue paying its debts.

Chegg should be familiar to most people who have attended college in recent years. It started in the 2000s with textbook rentals, then expanded to online study guides, and eventually a platform with pre-written answers to common homework questions.

Unfortunately, the launch of ChatGPT basically wiped out Chegg’s entire business model. For years, the company has paid thousands of contractors to write answers to questions on every major topic, which is a pretty labor-intensive process — and there’s no guarantee they’ll even have the answer to your question. As we know, ChatGPT, on the other hand, has ingested almost the entire Internet and has probably seen every historical question you could ask it.

Like the The Wall Street Journal reportsthe launch of ChatGPT saw students abandon their $20 per month Chegg subscriptions in favor of the chatbot:

Although Chegg has built its own AI products, the company has struggled to convince customers and investors that it still has value in a market disrupted by ChatGPT.

“It’s free, it’s instant, and you don’t really have to worry if the problem exists or not,” Jonah Tang, an MBA candidate at Point Loma Nazarene University in San Diego, said of of the benefits of using ChatGPT for homework help. on Chegg.

A survey of students by investment bank Needham found that 30% planned to use Chegg this semester, up from 38% in the spring, and 62% planned to use ChatGPT, up from 43%. %.

It’s unclear what Chegg can actually do to stem the bleeding at this point. The company laid off 441 employees over the summer, or a quarter of its workforce. It attempts to target what the new CEO describes as “curious learners” by offering more comprehensive AI-assisted answers as well as live guidance.

Perhaps the saddest thing is that, according to Newspaperemployees have actually requested resources in 2022 to develop AI tools to automate responses. The company saw a huge increase in demand during the pandemic for virtual learning and the company needed to produce answers to questions quickly.

Chegg executives rejected the request to start building AI tools until ChatGPT was released, but even then, some internally weren’t worried because of the chatbot’s propensity to make up incorrect answers.

But as with a tool like Wikipedia, it’s clear that students are willing to accept some risk for the sake of convenience. Students are told not to trust Wikipedia, but most use it anyway and head to the references section to retrieve citations. Of course, chatbots like ChatGPT have no concept of a subject like math, they just guess the words needed to form a correct-sounding sentence. They will return responses that seem deceptively correct but are not. It’s like having a calculator that works correctly 50% of the time. For other topics like history, chatbots are a bit better, but answers need to be double-checked.

Maybe Chegg could work harder to help people understand this? It seems most students don’t care, and time is running out for Chegg.