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Online learning platform Chegg said the rise of OpenAI’s ChatGPT is hurting its business as more students turn to the chatbot for homework help – a revelation that caused the company’s stock to plunge by more than 48% in early trading on Tuesday.
Chegg CEO Dan Rosensweig admitted during the company’s earnings call on Monday that ChatGPT – which has wowed the public with its lifelike responses to user prompts – was disrupting its ability to lure new customers.
“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,” Rosensweig said during the call.
“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,” he added.
Rosensweig said Chegg has maintained “very strong retention rates” of its existing customers since ChatGPT’s release.
