Post Thumbnail

Education giant accuses Google of destroying business

American educational technology company Chegg has filed a lawsuit against Google, accusing the search giant of using its AI-generated overviews to undermine demand for original content and destroy publishers’ ability to compete in the market.

According to the lawsuit filed Monday in Washington, Google appropriates publishers’ content to keep users on its own site, destroying financial incentives for creating original materials. In the long term, this will lead to a “hollowed-out information ecosystem that will be neither useful nor trustworthy,” the company claims.

Chegg, based in Santa Clara (California), provides textbook rental services, homework help, and tutoring. The company claims that Google’s AI overviews have led to a significant drop in visitors and subscribers. The situation is so critical that, according to CEO Nathan Schultz, Chegg is now considering selling or leaving the public market.

“Our lawsuit is not just about Chegg – it affects the entire digital publishing industry, the future of internet search, and students’ access to quality step-by-step learning that is being replaced by low-quality, unverified AI summaries,” Schultz stated.

Chegg shares closed Monday at $1.57, which is 98% below their 2021 peak value. In November, the company announced a 21% staff reduction.

Google spokesperson Jose Castaneda called the claims unfounded: “With AI Overviews, people find search more useful and use it more often, which creates new opportunities for content discovery. Google sends billions of clicks to sites across the web every day, and AI Overviews directs traffic to more diverse resources.”

Chegg claims that publishers allow Google to index their sites to generate search results, which Google monetizes through advertising. In exchange, publishers receive search traffic. However, now, according to the company, Google is forcing publishers to allow their information to be used for AI overviews and other features, resulting in reduced site visitors.

This lawsuit is considered the first in which an individual company accuses Google of violating antitrust laws through the use of AI overviews. Earlier, in 2023, an Arkansas newspaper made similar claims in a class action lawsuit on behalf of the news industry.

Autor: AIvengo
For 5 years I have been working with machine learning and artificial intelligence. And this field never ceases to amaze, inspire and interest me.
Latest News
AI chatbots generate content that exacerbates eating disorders

A joint study by Stanford University and the Center for Democracy and Technology showed a disturbing picture. Chatbots with artificial intelligence pose a serious risk to people with eating disorders. Scientists warn that neural networks hand out harmful advice about diets. They suggest ways to hide the disorder and generate "inspiring weight loss content" that worsens the problem.

OpenAGI released the Lux model that overtakes Google and OpenAI

Startup OpenAGI released the Lux model for computer control and claims this is a breakthrough. According to benchmarks, the model overtakes analogues from Google, OpenAI and Anthropic by a whole generation. Moreover, it works faster. About 1 second per step instead of 3 seconds for competitors. And 10 times cheaper in cost per processing 1 token.

Altman declared red alert at OpenAI due to Google's successes

Sam Altman declared "red alert level" at OpenAI, and this is not just corporate drama. This is an admission that the market leader felt competitors breathing down their neck. According to an internal memo, he is mobilizing additional resources to improve ChatGPT amid growing threats from Google.

Users spend more time with Gemini than with ChatGPT

OpenAI still leads in user numbers, but people are starting to spend more time with competitors. And this creates a serious problem.

Companies are bringing back 5% of those fired due to AI implementation failure

Many companies began bringing back employees fired because of artificial intelligence. Analytics company Visier studied employment data of 2.5 million employees from 142 companies worldwide. About 5% of fired employees subsequently returned to their previous employer. This indicator remained stable for several years, but recently began to rise.