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.”
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