Chegg, the education tech company that became the king of the classroom in the early days of 2021 during Covid, has become the ‘first company’ to be effectively ‘killed’ by AI. The online learning platform once traded as high as $113.51 per share in February 2021, riding a wave of pandemic-driven demand for remote education, giving it a market cap of roughly $14.7 billion at its peak.
That was then. By last year, the company’s market cap had collapsed to around $156 million, with its stock losing nearly 99% of its value in just a few years. At the time of writing, Chegg’s stock price was $0.99.The company will release its earnings results for the first quarter of 2026, which ended on March 31, 2026, on Wednesday, May 6. As per its fourth quarter 2025 results, the company’s Total Net Revenues was $72.7 million, which is a decrease of 49% year-over-year.
The ‘new realities’ of AI
In October, Chegg announced it was laying off 45% of its workforce (388 employees) as it struggled to survive the rise of generative AI tools like ChatGPT. For two decades, Chegg made its fortune by offering textbook rentals and a massive database of homework answers. However, students who once paid for Chegg subscriptions turning to free AI chatbots that can solve math problems and write essays in seconds.“The new realities of artificial intelligence… have led to plummeting revenue,” the company admitted in a statement at that time.
Apart from AI chatbots, Chegg is also fighting search engines. The company recently sued Google, arguing that AI-generated summaries at the top of search results are “stealing” its traffic. By showing students the answers directly on the search page, Google has cut off the flow of visitors to Chegg’s website – a claim that several other publications have made. Between ChatGPT’s instant answers and Google’s AI summaries, Chegg’s traditional business model has been squeezed into near-extinction.The fall has been as fast as it was brutal. Last year, Chegg was in danger of being kicked off the New York Stock Exchange because its stock price stayed below $1 for too long but it managed to claw back above that mark in May.As Chegg tries to reinvent itself for the AI age, its story serves as a stark warning to the tech world: even a $15 billion company can be rendered obsolete almost overnight when a more powerful technology arrives.
