Given the expansive A.I. discussion from April’s monthly letter, I’d be remiss not to mention what happened to Chegg on Tuesday.

If you’re unfamiliar, the company offers “educational support services,” including help with homework, as well as digital and physical textbook rentals and online tutoring.

Suffice to say that business model is vulnerable to disruption by A.I. and CEO Dan Rosensweig said as much on Monday afternoon, when the company delivered an uninspiring set of results. Here’s what he said:

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. 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. Fortunately, we continue to see very strong retention rates, suggesting that those students who already understand the value of Chegg continue to choose us and retain us at high rates. We are also expecting a positive recovery in enrollment trends, which historically would be good news for Chegg. Because it’s too early to tell how this will play out. We believe that it’s prudent to be more cautious with our forward outlook.

ChatGPT came up nearly two dozen times on the call.

The good news is, Chegg is working with OpenAI. To wit, from Rosensweig:

The first big step is the introduction of CheggMate, which we recently announced in cooperation with OpenAI. CheggMate will harness the power of ChatGPT paired with our proprietary data and subject matter experts to make learning more personalized, adaptive, accurate, fast and effective, all in an easy to use and conversational manner. The combination of Chegg’s experience over the last 13 years of improving student outcomes and our proprietary learning taxonomy to 150,000 subject matter experts in our network and the billions of pieces of unique learning content that Chegg owns, when coupled with the real time conversational nature of ChatGPT will establish CheggMate as a powerful and distinctive learning tool offered exclusively from Chegg.

That’s great, and it’s a good elevator pitch, but I’d gently note that “CheggMate” sounds a lot like “checkmate,” which is what many A.I. observers worry might be in store for business models that are vulnerable to A.I. disruption.

Rosensweig was keen to suggest that students and parents overwhelmingly want a human involved somewhere, but from the market’s perspective, the problem is clear enough: ChatGPT is a cost-effective alternative, where “cost-effective” means it’s free.

“I’m just really curious what happened in March. I know on the last call you really weren’t seeing much of an impact. You repeated it today in terms of ChatGPT. But what changed in March do you think?,” BMO’s Jeff Silber wondered.

To his credit, Rosensweig didn’t dance around the issue. “We’re beginning to see [it] on the margin. It’s not substantial yet,” he said. And then: “People who would normally pay for us around midterms or closer to finals… now have a new free site to go try.”

Rosensweig was optimistic. Or tried to be, anyway. “We’ve defeated all the free sites in the past pretty handily over time and we expect that with CheggMate we will have great success going forward,” he told Silber.

The stock fell nearly 50% on Tuesday. Now that’s a “CheggMate.”