(Photo Illustration by Pavlo Gonchar/Getty Images)

ChatGPT scrambled the Chegg

Chegg is on life support as college kids turn to ChatGPT to cheat on their assignments.

11/12/24 2:43PM

An interesting thought experiment of mine has been trying to figure out which businesses will eventually be killed by generative AI. So far, education tech company Chegg appears to be the biggest loser, with its market cap collapsing from $14 billion in February 2021 to just $191 million in November 2024, including a 49% single-day drop in May 2023. Over the weekend, The Wall Street Journal published an interesting (almost) epitaph on Chegg:

“Since ChatGPT’s launch, Chegg has lost more than half a million subscribers who pay up to $19.95 a month for prewritten answers to textbook questions and on-demand help from experts. Its stock is down 99% from early 2021, erasing some $14.5 billion of market value. Bond traders have doubts the company will continue bringing in enough cash to pay its debts…
A survey of college students by investment bank Needham found 30% intended to use Chegg this semester, down from 38% in the spring, and 62% planned to use ChatGPT, up from 43%.”

As someone who was an undergraduate student from 2015 to 2019, and an MBA candidate from 2022 through 2024, I’m in the unique position to have used Chegg to “help” with my undergraduate finance classes and ChatGPT to help with my graduate-school finance classes. In hindsight, Chegg’s death by GPT was one of the more predictable outcomes in public markets.

While Chegg’s management may disagree, Chegg’s primary utility has been helping college kids cheat on their assignments. In January 2021, when Chegg sported a $12 billion market capitalization, Forbes published an excellent feature story on how the company’s growth exploded during the pandemic as colleges turned to remote classes. The big takeaway: kids were using it to cheat. On everything. Forbes interviewed 52 students for the piece, and 42 of them straight-up admitted to using the site for cheating. The thing is, Chegg’s ability to be used as a cheating tool was dependent on the answers in Chegg’s database. While Chegg launched (or acquired companies that provided) a variety of services, its cash cow was Chegg Study, which had a database of 46 million textbook and exam answers, and most of those answers were supplied by freelancers from India. From Forbes:

“Chegg is based in Santa Clara, California, but the heart of its operation is in India, where it employs more than 70,000 experts with advanced math, science, technology and engineering degrees. The experts, who work freelance, are online 24/7, supplying step-by-step answers to questions posted by subscribers (sometimes answered in less than 15 minutes). Chegg offers other services students find useful, including tools to create bibliographies, solve math problems and improve writing. But the main revenue driver, and the reason students subscribe, is Chegg Study.
‘If I don’t want to learn the material,’ says a University of Florida sophomore majoring in finance, ‘I use Chegg to get the answers.’
‘I use Chegg to blatantly cheat,’ says a senior at the University of Portland.”

I mean, we shouldn’t be shocked by this. Students (not me, of course) were using Chegg before the pandemic was a thing. Remote learning removed any remaining friction from just looking up your answers online. However, while Chegg’s database was useful for finding solutions to questions that had previously been answered (or that closely resembled questions that had previously been answered), it was less effective for answering novel questions, because Chegg itself couldn’t solve anything. It outsourced that to India.

ChatGPT, on the other hand, does solve things. Instead of hoping that your question previously appeared on Chegg, you could just upload a screenshot to ChatGPT and let it cook. In April 2023, realizing that generative AI posed an existential risk, Chegg announced a partnership with OpenAI to build GPT-4-powered “CheggMate,” an “AI conversational learning companion.” Chegg then pivoted in August 2023 to a partnership with Scale AI, a platform used by companies like OpenAI and Nvidia to help train and build machine-learning algorithms, to build its own proprietary large language models.

The issue here was that Chegg’s models were never going to compete with OpenAI’s. OpenAI had a multi-year head start on training large language models, and GPT-4 was rumored to be trained on 1.8 trillion parameters. Was Chegg really going to build a more powerful model from its data set of 46 million answers?

The takeaway here, I think, is that if your business model is predicated on cheap overseas labor quickly answering customer queries, there’s a good chance that a generative-AI model can accomplish that goal cheaper and faster.

Tom Jones6/24/26

Prime Day is here again and Amazon’s subscription service has never been more popular

Well, it’s that time of year again: many have made their wish lists, people are scraping together the money they’ve saved to pick out a perfect gift, some are presumably leaving out refreshments for the weary delivery drivers and, more and more, drones.

It’s Amazon Prime Day — meaning that it’s the second day of the four-day promotional event that Amazon still calls Prime Day — of course, and it’s even come early this year, with the company bringing the period into late June from July, when it’s been traditionally held for the last five years.

The Prime Age

Alongside the eyes and endless clicks that the arbitrary stream of listicles on “The Best Prime Day Deals” that almost every media outlet pours into, Amazon will also be cheering the fact that there’s now more Prime users than ever before to devour the retailer and its sellers’ sometimes-contested “discounts.” Indeed, according to the latest annual estimates from Consumer Intelligence Research Partners (CIRP), there were just over 200 million American shoppers using Amazon’s massive subscription service at the end of 2025.

Max Knoblauch6/15/26

Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

Millie Giles6/11/26

JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

Max Knoblauch6/8/26

Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”