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AI Disruption Deepens as Chegg stock plunge

AI market disruption has already started!

The speed of disruption brought on by a worldwide rush into artificial intelligence was on full display this week, sending shares of education technology company Chegg Inc. plunging, prompting IBM to halt some hiring, and prompting a chatbot ban at Samsung Electronics Co.

Tweet on AI disruption the educational service Chegg

Bloomberg chart on Chegg

Chegg shares plunged more than 40% in early trading on Tuesday after the company said OpenAI’s ChatGPT is threatening the growth of its homework-help services. The San Diego-based company makes most of its money from subscriptions and offers online guidance for test taking and essay-writing, tasks some students outsource to freely available ChatGPT tools.

Educational publisher Pearson Plc fell by the most in a year in London trading.

International Business Machines Corp. Chief Executive Officer Arvind Krishna said in an interview with Bloomberg on Monday that the company is going to stop or slow hiring for jobs it believes will be replaced by artificial intelligence. That amounts to about 30% of its 26,000 workers in non-customer facing roles over a 5-year period, he said.

The Writers Guild of America, representing more than 11,500 Hollywood writers, included the regulation of AI among their demands as they started their first strike in 15 years on Tuesday. While the union doesn’t oppose using AI as a tool, it says it should not share writing credits, or get a chunk of the residuals.


Image: ChatGPT