A check I saw on the New York Stock Exchange on February 13th, 2025.
Daniel Devries | CNBC
chegg He filed a lawsuit in U.S. District Court on Monday. Googleclaims that an AI summary of search results is undermining traffic and revenues of online education companies.
The legal move has been nearly two years since former CEO Dan Rosensweig said students working as Openai’s ChatGPT assistant are cutting into the growth of Chegg’s new clients.
Chegg was worth less than $200 million, and in trading after Monday’s trading, the stock was just above $1 per share. Chegg is engaged in Goldman Sachs and will consider strategic options, such as getting and becoming private.
Chegg reported a net loss of $143.5 million in fourth quarter revenue at $143.5 million, according to the statement. Analysts voted by LSEG were hoping to earn $142.1 million. Management sought first quarter revenues between $114 million and $116 million, while analysts had a target of $138.1 million. Stocks fell 24% in extended trading.
Google squad companies like Chegg “providing their own content to be included in Google’s search capabilities,” Schultz said, adding that search companies use exclusive rights, and that Chegg’s content is You’re eliminating your financial gain and earning Dime without spending. “
Despite the suit, Chegg has its own AI strategy. It is drawn Meta Schultz also mentions open source llamas and the privately held model of humanity and Mistraral. Chegg is also partnering with Openai, which education companies consider to be a competitor alongside Google. The company reported that 3.6 million students had received a 21% reduction in subscription in the fourth quarter. Subscriptions include access to AI-powered learning assistance. Chegg also borrows textbooks to sell.
The AI ​​overview, called Google’s AI Summary, is available in the company’s search engines in over 100 countries with over 1 billion users, the company said in October. They appear above links to other pages in the search results.
A Google spokesperson told CNBC the company would defend itself against Chegg’s lawsuit. This allegedly violated one and two sections of the Sherman Antitrust Act of 1890.
“Every day, Google sends billions of clicks to sites on the web, and AI overviews send traffic to more diverse sites,” a Google spokesperson said.
Chegg claimed that Google drew about Chegg’s collection of 135 million questions and answers on various subjects in the model training dataset.
After training the model, Google was able to generate content that competes with the information provided by the publisher in search results, and Chegg argued in that complaint. The online learning company contains screenshots of Google AI overviews that borrow details from Chegg’s website but do not attribute information. However, related Chegg pages will appear in search results with a drop in their search results.
Chegg cited the federal judge’s ruling last August that Google had held a monopoly in the search market. The decision comes after the Justice Department filed a groundbreaking case in 2020, when Google managed the general search market by creating a strong barrier to entry and a feedback loop that maintains its advantage. He claimed that he did.
Watch: Google will roll out AI overviews in six more countries
