Chegg Inc. (NYSE: CHGG), an American edtech company offering homework help, book rentals, online classes, and student services, has experienced a dramatic decline from a former Wall Street favorite to a near-defunct stock, disrupted by generative AI tools like ChatGPT and Gemini that provide instant answers to students.
Rise and Fall of Chegg
In February 2021, Chegg’s stock traded as high as $115 with a market capitalization of $14.7 billion, capitalizing on record demand for online education during the COVID-19 pandemic. The company achieved record financial results during this period.
However, the advent of generative AI tools completely disrupted the edtech market. These tools offer instant answers to students, making platforms like Chegg redundant.
Massive Layoffs Signal Crisis
Chegg announced two waves of mass layoffs:
- May 2025: 248 employees laid off, approximately 22% of staff
- October 2025: 388 employees laid off, approximately 45% of staff
In the October announcement, Chegg blamed the “new realities of AI” and low Google traffic for a decline in traffic and revenue.
Current Stock Performance
At press time, Chegg’s stock was trading at $1.02 with a market capitalization of $114.59 million. The company’s stock has struggled to remain above the $1 price threshold and has nearly avoided delisting from the New York Stock Exchange.
Broader AI Impact on Tech and Crypto Industries
Chegg’s disruption reflects a broader pattern of AI reshaping multiple sectors. Leading Bitcoin miners are pivoting away from cryptocurrency operations to capitalize on AI opportunities.
Hut 8 (Nasdaq: HUT) and TeraWulf (Nasdaq: WULF), major Bitcoin mining companies, are transforming into AI centers. Bitcoin mining companies have ready infrastructure and are rapidly converting operations to serve the more profitable AI sector. Bitcoin mining has not remained a profitable venture compared to running AI operations.
Block Inc. (Nasdaq: XYZ), Jack Dorsey’s Bitcoin-centric fintech company, laid off 40% of its staff in February. Dorsey remarked that Block will be “significantly more valuable as a smaller, faster, AI-native company.”
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Morgan Stanley Launches Stablecoin Reserve Fund, Positioning as Industry Reserve Manager
Gate News message, April 25 — Morgan Stanley Investment Management (MSIM) has unveiled a stablecoin reserve portfolio fund (MSNXX), a government money market fund designed exclusively for stablecoin issuers to securely hold reserves backing their tokenized fiat versions. The fund invests solely in t
GateNews3m ago
SpaceX, OpenAI, and Anthropic IPOs Could Attract Over $240 Billion, Potentially Impacting Crypto Market Liquidity
Gate News message, April 25 — According to market reports, SpaceX is expected to go public in June with a fundraising target exceeding Saudi Aramco's record $29 billion IPO, while OpenAI and Anthropic are planning to list in the second half of 2026. The three companies are projected to
GateNews53m ago
Ethereum Spot ETFs Record $23.38M Net Inflows; BlackRock ETHB Leads with $32.25M
Gate News message, April 25 — Ethereum spot ETFs recorded total net inflows of $23.38 million yesterday (April 24), according to SoSoValue data.
BlackRock's Staked ETH ETF (ETHB) led all funds with $32.25 million in daily net inflows, bringing its historical total net inflows to $32.25 million. In
GateNews2h ago
Bitcoin Spot ETFs Record $144.49M Net Inflows, Extending 9-Day Streak
Gate News message, April 25 — Bitcoin spot ETFs recorded net inflows of $144.49 million yesterday (April 24, Eastern Time), according to SoSoValue, extending a nine-day streak of positive inflows.
BlackRock's IBIT led all funds with $22.879 million in single-day inflows, bringing its historical tot
GateNews2h ago
GPU Shortage Returns as Microsoft, Amazon Tighten Supply; AI Startups Face 32% Price Hike and Year-End Queues
Gate News message, April 25 — A GPU shortage is resurfacing as major cloud providers including Microsoft and Amazon concentrate computing capacity toward internal teams and major customers like OpenAI and Anthropic, leaving smaller AI startups facing price increases, extended wait times, and stricte
GateNews3h ago
JPMorgan: Tokenization Will Drive Fund Industry Change, But 'Good Use Cases' Still Years Away
Gate News message, April 25 — JPMorgan's global head of ETF product, Ciarán Fitzpatrick, said tokenization should drive change across the entire funds industry. "We believe tokenization will certainly drive how the market changes, not just for ETFs but across the funds industry as a whole," Fitzpatr
GateNews3h ago
