Chegg's AI Upgrades: A Defensive Tool to Stabilize Cash Flows and Buy Time Amid Declining Legacy Traffic
ByAinvest
Friday, Jan 2, 2026 10:13 am ET1min read
CHGG--
Chegg's core academic business has declined 40% YoY in Q3 2025 due to AI-powered search disrupting student access to academic help. The company has invested in AI to improve efficiency and automate content delivery, slashing operating expenses and repositioning the legacy unit as a cash-generating business. However, AI-enhanced products cannot compete with free, embedded AI answers through search engines and large language models. Chegg's AI upgrades are a defensive tool to stabilize cash flows and buy time, while shifting growth ambitions to B2B skilling, language learning, and workforce AI education.
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