AI is going to both create and destroy businesses. An interesting victim of AI is the academic assistance business.

Academic dishonesty, the dark side of academic assistance, is a fancy term for cheating. With profit-motivated websites like Chegg.com, cheating became easier.

When taking an exam, a student could take a photo of a difficult problem and send it to Chegg. In literally minutes, the student would be sent the answer over a cell phone. How do they do it? Often Chegg employs smart nerds from poor countries who, by local standards, are paid big bucks for their efforts. To use Chegg, a subscription is needed.

But why include a human in the loop when AI can give you a quicker answer? The availability of AI has made Chegg largely irrelevant. Once a  thriving business, Chegg is now facing a steep decline. The company’s stock has plummeted by 99% from its 2021 highs, erasing $14.5 billion in value. Chegg’s challenges are emblematic of how disruptive technologies can upend established business models.

Chegg’s primary challenge comes from the rise of AI-powered tools like ChatGPT. AI has transformed how students approach both learning and cheating. Unlike Chegg’s subscription-based model, where users pay a monthly fee for access to pre-written solutions and human assistance, AI tools offer instantaneous and comprehensive answers for free or minimal cost.  

As a result, the former billion dollar company Chegg looks to be headed for the same fate as the buggy whip factory.