Chegg Embraced AI. ChatGPT Ate Its Lunch Anyway

Investors were surprised when the online education company Chegg last month revealed that ChatGPT was hurting subscriber growth--the company lost half of its market value overnight. But long before Chegg became an index case for the disruptive force of ChatGPT, its top brass had heard plenty of warnings about the threat and opportunity of generative AI. For years, on afternoon walks outside Chegg's Silicon Valley headquarters, former executives say they had discussed someday slashing costs by tapping AI programs to replace an army of instructors that answer student questions and draft flashcards. Matthew Ramirez, a product leader who left Chegg two years ago, says he even advised CEO Dan Rosensweig in 2020 that generative AI would be the bus that ran down Chegg if it didn't prepare itself. And just weeks after OpenAI launched ChatGPT last November, a source familiar with the exchange says, one Chegg executive had the bot write an email to Rosensweig urging him to develop a ChatGPT rival.