What ChatGPT’s corporate victims have in common

The first casualties of generative AI offer lessons for other businesses

In less than four years the share price of Chegg, an online education service, has dropped by 99%. A post-pandemic slump in digital learning is partly to blame for its tumble. A bigger problem for the company, though, is artificial intelligence (AI). Its customers are mostly students who want help answering their homework assignments, which often involves the virtual support of a human tutor. The rise of ChatGPT and its kind have created a free substitute for that service. On an earnings call on November 12th Nathan Schultz, Chegg’s boss, admitted that “technology shifts have created headwinds”. The same day the firm said that it would fire a fifth of its workforce.

This article appeared in the Business section of the print edition under the headline “Death by LLM”

From the November 23rd 2024 edition

Discover stories from this section and more in the list of contents

The world’s top condom-maker is getting squeezed

Will Karex break under pressure?

Franchising has quietly made countless Americans rich

In the age of AI, running a McDonald’s may soon look a lot more appealing

Why you should (almost) always look on the bright side of life

The benefits—and dangers—of optimism

Can an Italian company disrupt Germany’s broken railway industry?

Deutsche Bahn could soon have a rival

A new mega-deal shows how AI has turned utilities into hot property

NextEra and Dominion must now win over regulators

How Star Wars went from space opera to soap opera

Disney turned its flagship film franchise into TV fodder. Can it go back to the big screen?