Last update: 03 May 2023, 02:32 HST
ChatGPT struggled with the mathematical processes needed for tax, financial and managerial assessments (Representative image)
Specifically, the 18-year-old company reported a 7% year-over-year drop in sales along with a 5% drop in subscribers.
Shares of companies specializing in publishing textbooks and offering online courses took a big hit on Tuesday after signs emerged that AI bots such as ChatGPT were eating away at their business.
Silicon Valley-based Chegg is an educational technology company that provides online homework help and textbooks, and on Monday its CEO admitted that the explosion of generative AI chatbots has hurt revenue.
“During the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth and we were meeting expectations for new signups,” Chegg CEO Dan Rosensweig said Monday. , to analysts.
“However, since March we have seen a significant increase in student interest in ChatGPT. We now believe this is impacting our rate of new customer growth,” he added.
Specifically, the 18-year-old company reported a 7% year-over-year drop in sales along with a 5% drop in subscribers.
The admission sent shockwaves through the edtech sector, sending Chegg’s share price plummeting nearly 50% and hammering similar companies such as UK-based Pearson, which lost 15% in London.
The chief executive insisted that students’ switch to ChatGPT was a blow and that customers who have retained their faith in the company’s products “continue to choose us and retain us at high rates”.
He also said he launched his own AI-powered tool called CheggMate, which was student-friendly and based on GPT-4, the latest iteration of Microsoft-backed OpenAI-created technology that powers ChatGPT.
Chegg has in the past faced similar accusations directed at ChatGPT for providing students with out-of-the-box ways to cheat, particularly during the Covid-19 pandemic when testing was largely conducted online outside of teacher supervision.
While ChatGPT-like AI was widely seen as a boon to the economy, the implosion of edtech stocks was the clearest example yet of technology’s ability to attack business results.
Given the untested nature of the technology, experts believe that the companies most vulnerable to AI at the moment are those that require little specialization – such as call centers or tutoring services offered by Chegg and others.
Right now, “you’ll only see very specific kinds of tasks that people are willing to give to generative AI,” said Vishal Gupta, associate professor at the USC Marshall School of Business.
These tasks are going to be “lower stakes” given the uncertainties about the technology, he added.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
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