Chegg’s Crash in the Age of Chegg and ChatGPT
Chegg’s story has become a cautionary tale about what happens when a traditional homework-help model collides with generative AI. During the remote learning boom, the company’s stock rocketed, once reaching a market capitalization of roughly $14.7 billion as students flocked to its textbook rentals and vast database of step-by-step answers. But within a few years, that value collapsed to around $156 million, and its stock price slid to $0.99 as students shifted to free tools like ChatGPT and other AI homework help services that can generate solutions and explanations on demand. Chegg’s total net revenues fell 49% year-over-year to $72.7 million in its latest reported quarter, and it laid off 45% of its workforce as it struggled to adapt. Between AI chatbots and AI-generated search summaries, its subscription-based answer library suddenly looks expensive, slow and, for many students, unnecessary.
Teachers Using AI: 80% Are Already On Board
While Chegg fights for survival, classrooms are moving in the opposite direction: toward deeper, structured use of AI in teaching. In a recent survey of 11,500 educators for the State of the Classroom report, 80% said they have used generative AI tools. A majority, 58%, reported using AI regularly or occasionally, while 22% had experimented only once or twice, and one in five had never used it. Crucially, these teachers are not outsourcing grading—only 4% use AI for that. Instead, they lean on AI for instructional support: 44% create lesson resources, 20% brainstorm ideas and 17% tackle administrative tasks. Even so, 93% believe AI cannot replace teacher-created materials, and many see it as just a starting point rather than a finished product. The message for students is clear: AI in classrooms is real, but it is being framed as a helper, not a teacher.
AI in Classrooms and the Shrinking Role of Traditional Study Tools
As AI in classrooms becomes normal, the value proposition of older student study tools is being rewritten. Chegg and ChatGPT no longer sit on opposite sides of the fence; teachers and students now share many of the same AI engines. Educators under high workload stress—60% describe their stress as high or critical—are using AI to design activities, worksheets and practice questions, often the very kinds of materials students once sought from paid platforms. When a teacher can generate custom practice sets, and a student can ask an AI homework help chatbot for instant clarification, the need for a static answer database diminishes. Subscription-based study aids must now compete with personalized, conversational support that’s available for free. Instead of paying mainly for access to answers, students are increasingly paying—if at all—for structure, curation and accountability layered on top of ubiquitous AI tools.
Shortcuts, Integrity and Assignments in an AI-Rich Environment
The same tools that weakened Chegg can erode academic integrity if used as copy-paste answer machines. Teachers know this, and their AI strategies reflect a growing emphasis on process over product. Many are redesigning assignments to prioritize in-class work, oral explanations, iterative drafts and personal reflection—tasks that are harder to outsource entirely to AI. With most educators saying AI cannot replace human-created resources, they are treating it as a draft generator or idea spark, then requiring students to revise, annotate and defend their work. This shifts the question from “Did you get the answer?” to “Can you explain your thinking?” Plagiarism policies are also evolving to distinguish between using AI for brainstorming or feedback and passing off AI-generated text as original work. In this new environment, students are being pushed to show evidence of their learning steps, not just the final result.
Healthy AI Study Habits for Students and Parents
For families, the collapse of Chegg and the rise of AI homework help signals a need to rethink study habits, not just subscriptions. The most productive use of AI in classrooms mirrors the healthiest use at home: explanation, practice and feedback rather than full-solution copying. Students can ask AI to rephrase concepts in simpler terms, generate additional examples, or quiz them with new questions, then check their own reasoning against the model’s. Parents can encourage children to paste their own draft answers in and request critiques, rather than asking for ready-made essays. A good rule: AI should make you think more, not less. If a tool leaves a student unable to solve similar problems without it, it’s being misused. As teachers increasingly design AI-aware assignments, students who learn to collaborate with AI—rather than lean on it—will be the ones truly prepared for the new classroom.