Chegg is suing Google parent Alphabet over claims the search engine’s artificial intelligence summary tool has hit its revenues, leading the US-listed educational technology group to weigh up a sale of the business.
California-based Chegg, which provides study tools for students, filed the complaint on Monday claiming that Google AI Overviews, which presents users with summary answers to their queries, serves to keep users on Google’s own site.
Chief executive Nathan Schultz said the search giant’s AI search changes had “unjustly retained traffic that has historically come to Chegg, impacting our acquisitions, revenue and employees.”
He added this was “materially impacting” revenues, leading the company to instigate a strategic revenue in which it would explore “a range of alternatives to maximize shareholder value, including being acquired, undertaking a go-private transaction, or remaining as a public standalone company.”
Google said: “With AI Overviews, people find search more helpful and use it more, creating new opportunities for content to be discovered. Every day, Google sends billions of clicks to sites across the web, and AI Overviews send traffic to a greater diversity of sites. We will defend against these meritless claims.”
Chegg’s move comes as developments in AI shake global industries, from health care to education and the automotive sector. The fast development of generative AI since OpenAI launched ChatGPT in November 2022 has upended demand for edtech companies’ paid-for online learning tools, leading their valuations to plummet.
Article by:Source: Maxine Kelly, Financial Times
