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Pearson shares slump after ChatGPT hits rival US online education firm

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Pearson has reported a 20 per cent slowdown in its virtual learning unit as it attempts to pivot to become a tech-first company.
Pearson has reported a 20 per cent slowdown in its virtual learning unit as it attempts to pivot to become a tech-first company.

Shares in London-listed educational publisher Pearson fell today after US rival Chegg warned that ChatGPT was having a negative impact on its business.

The California-based online learning platform said today that ChatGPT was starting to have a negative impact on the number of students using the platform, as it reported a seven per cent slump in revenue to $187.6 million.

“In the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth and we were meeting expectations on new sign-ups,” Dan Rosensweig, Chegg’s president and chief executive Dan Rosensweig, said.

“However, since March we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate,” he said.

Chegg also withdrew its full year guidance and warned that revenues would likely fall in the next quarter.

Chegg’s share price fell nearly 50 per cent following the news.

The warning spooked investors throughout the education and publishing sector, as Pearson’s shares fell by over 12 per cent. Shares in US-listed rivals Udemy and Coursera also dropped.