![]() Just imagine how different the Chegg earnings call would have been if the company had announced that it had integrated ChatGPT with its subscription packages, making it available to all of its customers. And executives need to be able to communicate their product strategy with regards to artificial intelligence to the market. ![]() Companies need to embrace this technology and figure out how to leverage it in their own businesses. We all see what’s happening right now and how fast it’s moving. ![]() What happened with Chegg is a great example of what not to say and do. FSD isn’t perfect yet, but it is very close. And Tesla’s Full Self Driving (FSD) software is already demonstrating full Level 5 autonomous driving capabilities with no driver interventions. And yet, we all know that Waymo and Cruise already have commercial deployments of the technology working in several cities around the U.S. Many have said it won’t be available for at least another decade. Rosensweig’s comments regarding ChatGPT remind me of the traditional automotive industry when they talk about autonomous driving technology. The guidance may not have shown strong growth in the business, but it would have at least provided reassurance that Chegg executives understand their business and market.īut the false comments about ChatGPT destroyed confidence by Wall Street analysts and institutional investors, which is what really drove the 50%+ selloff in a day. After all, its business is very predictable, and students will still need to rent the textbooks that are assigned to classes. It was a mistake not to provide guidance. When a CEO makes a broad, sweeping statement claiming that a competitive technology won’t be “right anytime soon,” which is clearly not substantiated and the opposite of what is known to be true… the company is in trouble. That’s where Rosensweig really went wrong. And it will become an even more powerful platform for study and learning. With each improvement, there will be fewer errors. It doesn’t even require an exponential mindset to realize that by the end of 2023, ChatGPT and other similar large language models will be radically better than they are today. And each iteration of the technology has been materially better. OpenAI has gone from GPT-3, to ChatGPT & GPT-3.5, to GPT-4 in the span of just five months. Yes, ChatGPT and other large language models do occasionally “hallucinate” and get things wrong… But most of the time, they do a remarkable job of not only getting things right, but synthesizing and condensing exactly the information that we need in seconds.Īnd the striking realization for those of us that have been following the advancements in generative artificial intelligence (AI), which includes all of my Bleeding Edge readers, is the sheer speed at which the technology has been improving. His defense was simply that the markets’ response to his comments were “extraordinarily overblown” and that “ChatGPT is often wrong, and it’s not going to be right anytime soon.” Wow – that has got to hurt…Īnd yet yesterday, Rosensweig seemed intent to dig his hole even deeper. And even with the small rebound towards the end of the day, it was still down 44%. The stock collapsed more than 50% yesterday. Talk about a red flag! Here’s what happened yesterday to Chegg’s share price: ![]() Therefore, we intend to provide only the next quarter’s guidance at this time. What he said next was even worse.īecause it’s too early to tell how this will play out, we believe that it’s prudent to be more cautious with our forward outlook. Rosensweig’s comment above was referring to OpenAI’s ChatGPT and its impact on Chegg’s core business growth. That’s what makes up about 90% of the company’s revenue.Ĭhegg’s strategy for business growth is built around selling additional subscription services to products that help students learn subject matter, memorize information, and prepare for exams. Chegg enables them to rent the e-book version of every textbook. It’s a great business as students really don’t want to buy a $170 textbook that they’ll only use for a few months. It is most well-known for selling monthly subscriptions for electronic textbooks to students. Those were the words of Chegg CEO Dan Rosensweig late Monday afternoon on Chegg’s first quarter 2023 earnings call.Ĭhegg is a major player in the online learning space. “ We now believe it’s having an impact on our new customer growth.” The CHIPS Act is running into resistance from the industry….How artificial intelligence could transform “wet work”.The hottest IPO of 2020 makes its generative AI debut.
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