AI race drives down stock market valuations of education firms

Stock exchange companies threatened by Chegg observation that ChatGPT has hit revenues

The artificial intelligence race is already producing losers. On Tuesday, education companies trading on the London and New York stock exchanges saw hundreds of millions wiped from their valuations after Chegg, a US firm that provides online help to students for writing and maths work, said ChatGPT was affecting customer growth.

The firm said it had seen a “significant spike” in students using the technology, and withdrew its profits guidance for the rest of the year, warning revenues had already been hit. It shares almost halved in value. The ripples were felt in London, where education giant Pearson’s stock closed down 15%.