ChatGPT Is the Start of Online Education, Not the End

tech.hindustantimes.com:

Of the dozens of listed companies talking up the potential of ChatGPT-like technologies, Chegg Inc. is among the first to publicly state just how deleterious the trend could be for its business. It needn't be, though management seems ready to ride the wave of this new innovation rather than swim against the current.

Chegg describes itself as a “student-first connected learning platform.” With annual revenue of just $767 million last year, it is nowhere near the scale of behemoths jumping on the artificial intelligence bandwagon, such as Alphabet Inc., Microsoft Corp. and Amazon.com Inc.

Yet online education is a huge industry, estimated by researcher Statista at $167 billion this year and climbing to $239 billion by 2027. Chegg's slice of that market is centered around helping college students with homework and cramming for exams, and charges subscriptions starting at $14.95 per month. The pandemic was good for business, with revenue jumping 57% in 2020 and 20% the following year.

But then it faced a confluence of factors, including a return to campus and a reduced emphasis on academic rigor by both learners and professors. As a result, sales dropped last year.

Still, shareholders seemed to have been caught unaware by the next big challenge. Chegg's shares dropped 38% after the Santa Clara-based company made a simple comment about the advent of OpenAI's generative chat product, ChatGPT. “In the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth and we were meeting expectations on new sign-ups. However, 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.”

ChatGPT's greatest strength is to mimic human