It happened fast. One minute you're the king of college dorm rooms, worth $13 billion, and the next, you're laying off half your staff because a chatbot decided to go to school.
Chegg was the ultimate "homework helper." If you were a student between 2010 and 2022, you probably paid for it. You’ve probably seen the orange logo while frantically searching for a physics solution at 2:00 AM. But then, OpenAI dropped ChatGPT, and the math changed instantly. Why pay $19.95 a month for a library of answers when you can get them for free, in seconds, from an AI that doesn't judge you?
Chegg vs ChatGPT: The $13 Billion Meltdown
The numbers are honestly brutal. In early 2021, Chegg’s stock was riding high at over $110 per share. By the start of 2026, it’s hovering around $1. That isn't just a "bad year." It’s an extinction-level event.
Most people think this is just about "cheating." It’s not. It’s about the friction of information.
With Chegg, you had to search a database. Sometimes the answer wasn't there. Then you’d have to upload a photo of your assignment and wait—hours, sometimes—for a human contractor in India or the Philippines to write out a solution. ChatGPT deleted that wait time. It’s the difference between ordering a book from a catalog and just thinking of a sentence and seeing it appear.
The Google Factor
Google didn't help. Actually, they sort of twisted the knife.
Chegg recently sued Google, claiming that "AI Overviews" (those summaries at the top of search results) are basically stealing their content. Think about it: a student searches for a complex chemistry problem. Instead of clicking the Chegg link and hitting a paywall, Google’s AI just scrapes the answer and shows it right there on the search page.
Chegg's non-subscriber traffic plummeted by nearly 50% by late 2025. When the "top of the funnel" dries up, the business dies.
Why Students Swapped the "Expert" for the Machine
There’s a misconception that ChatGPT is just "better" at the work. It’s actually often worse at high-level math or niche legal theory than a human expert. But students don't care about 100% accuracy as much as they care about 24/7 availability.
- The "Why" Factor: ChatGPT explains things. You can ask it to "explain this like I'm five," then "now explain it like a grad student." Chegg’s static PDFs couldn't do that.
- The Cost: $20 a month is a lot for a college student living on ramen and caffeine. Free is a very hard price point to beat.
- The Interactivity: You can't argue with a Chegg answer. You can tell ChatGPT, "I don't think that's right, check your work on step three."
The disruption of online education wasn't a slow burn. It was a cliff. In May 2023, the CEO, Dan Rosensweig, admitted on an earnings call that AI was hurting growth. The stock dropped 48% in 24 hours. Investors realized that the "moat" Chegg spent a decade building—120 million proprietary answers—was suddenly worth a lot less.
The Pivot: Can Chegg Survive 2026?
They aren't just sitting there waiting to go bankrupt. But the "homework help" business is basically a ghost of its former self.
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By late 2025, Chegg shifted gears hard. They laid off 445 employees in a massive restructuring, refocusing on what they call "Chegg Skilling." Basically, they’re trying to move away from 19-year-olds doing algebra and toward "B2B" (Business-to-Business) training.
They’re betting on professional certifications, language learning (through their Busuu acquisition), and helping companies "reskill" their workers for the AI era. It’s ironic, really. They’re trying to survive the AI disruption by teaching people how to use AI.
Is AI Actually "Better" for Education?
Ask a professor and they’ll probably groan. Many educators see the Chegg vs ChatGPT battle as a race to the bottom for student effort.
However, there’s a nuance here. AI-native platforms like Khan Academy’s "Khanmigo" are showing that AI can be a tutor, not just a shortcut. The problem for Chegg was that their brand was too closely tied to "the answer" rather than "the learning." When the answer becomes a commodity, you have to sell the experience.
Actionable Insights for the AI Era
If you're a student, a creator, or a business owner watching this disruption, here’s how you actually navigate it:
- Don't bet on "Information Gatekeeping": If your value is just holding information behind a paywall, an LLM will eventually find a way through it.
- Focus on "Process" over "Product": In education, the "product" is the answer. The "process" is the understanding. Tools that help with the process (like interactive AI tutors) are the ones that will still be here in five years.
- Verify Everything: ChatGPT hallucinates. A lot. Especially in advanced physics or math. If you're using it for school, you have to be the editor. If you can't spot its mistakes, you aren't learning.
- Watch the B2B Pivot: Keep an eye on how legacy companies like Chegg or Pearson move into corporate training. That's where the money is moving because "upskilling" is now a permanent requirement for employment.
The era of the "expert answer" database is over. We’ve entered the era of the "conversational coach," and for the legacy players, the transition is proving to be a lot more painful than anyone predicted.
To keep ahead of these shifts, start by integrating AI as a peer-review tool rather than a primary source. This develops the critical thinking skills that "answer-key" platforms never required, and it's the only way to remain relevant in a job market where the "answers" are now free for everyone.