Chegg, Inc.’s CHGG core academic business has been significantly impacted by the rapid adoption of generative Artificial Intelligence (AI) and a sharp decline in Google-driven traffic. This resulted in a more than 40% year-over-year decline in revenues in the third quarter of 2025. With AI-powered search disrupting the process of students accessing academic help, CHGG’s legacy traffic has reduced by nearly 50% as of the third quarter of 2025.
Given the shift in the market trends, Chegg has been heavily investing in AI to improve efficiency, automate content delivery and enhance user experience across Chegg Study, Math and Writing. These upgrades will allow the company to serve most student queries using its existing database of more than 130 million questions, significantly lowering costs and capital intensity. As a result, CHGG has been able to slash operating expenses and reposition the legacy unit as a cash-generating business rather than a growth engine.
However, with a high-quality AI-enhanced product, Chegg admits it cannot compete head-on with free, embedded AI answers offered directly through search engines and large language models. Notably, Chegg’s AI strategy is increasingly about prolonging the tail of the legacy business while funding its pivot to Chegg Skilling. AI has enabled leaner operations, lowered capital expenditure and ensured better margin prospects, helping the academic segment generate cash for several years.
Summing up, Chegg’s AI upgrades are unlikely to “fix” the collapse in legacy traffic; rather, they serve as a defensive tool by stabilizing cash flows and buying time. The trends will continue while the company shifts its long-term growth ambitions toward B2B skilling, language learning and workforce AI education.
Chegg operates in a highly competitive landscape, with renowned names like Duolingo, Inc. DUOL and Udemy, Inc. UDMY operating beside it in the ed tech market.
Duolingo dominates the language-learning niche with its gamified app and AI-driven engagement. With a strong mobile presence and daily user engagement, Duolingo has built a brand synonymous with accessible, bite-sized learning. On the other hand, Udemy continues to scale its vast marketplace model, leveraging thousands of independent instructors to address fast-changing professional and technical learning needs.
Chegg’s challenge is proving that its B2B skilling pivot can deliver durable growth, while Udemy continues expanding its corporate footprint and Duolingo deepens monetization through subscriptions and new product lines. Ultimately, Chegg, Udemy and Duolingo illustrate three divergent approaches to competing in an ed-tech market reshaped by AI, corporate upskilling demand and the need for measurable learning outcomes.
