(News Bulletin 247) – The managing director of Chegg, a Californian company that offers a range of services to schoolchildren and students, has warned that the use of chatbots is weighing on the growth of his company.

The emergence of ChatGPT creates threats and disruptions for various industries. OpenAI, the company behind the famous chatbot, estimated in March that 80% of employees in the United States will see at least 10% of their tasks affected by ChatGPT.

This technological revolution is already having some tangible effects. The case of the Californian company Chegg, born in 2005, illustrates this perfectly. Listed on the New York Stock Exchange, this company describes itself as “edtech”, a start-up specializing in digital services related to education.

More concretely, it provides homework support for pupils and students, or online textbooks. Or even practical advice, such as how to organize your finances with a roommate. As Bloomberg notes, the bulk of this company’s revenue is made through subscriptions, which start at just under $16 per month.

The general manager of this company, Dan Rosenweig, indicated in the night from Monday to Tuesday that his group had “noted since March a significant breakthrough of the interest of the students for ChatGPT”. “We now believe this is having an impact on the growth rate of our new customers,” he added, quoted by Reuters.

Dull revenue projections

The company suspended its annual guidance and gave disappointing second-quarter revenue projections of between $175 million and $178 million, when analysts had expected 186.3 million.

All of these announcements are unsurprisingly penalized by investors. Chegg shares thus plunged 47% at the start of the session on Wall Street.

However, the company is not standing idly by and is also trying to ride the wave of artificial intelligence. It is due to launch CheggMate, an online learning platform for students using GPT-4, OpenAI’s most advanced artificial intelligence model, this month.

Quoted by Barron’s, KeyBank Capital Markets believes, however, that this initiative “raises questions” both in terms of the “monetization” of this service and its “adoption”. Until Cheggmate proves itself, we believe the competitive threat of ChatGPT remains a headwind” for Chegg’s stock, the research bureau adds.

“The risks are becoming real,” said Morgan Stanley, which according to Bloomberg has sharply slashed its earnings forecast for the company.

As quoted by CNBC, Jefferies has lowered its buy-to-hold advice on the stock, due to the threat ChatGPT poses to the company’s core business.