The launch of ChatGPT in late 2022 ushered in a new era of technological innovation that few people ever imagined. As the tool gained steam, reportedly hitting 100 million users within about two months of its launch, Wall Street lauded the generative artificial intelligence, viewing its debut as akin to the iPhone’s launch in 2007. At first glance, companies like Alphabet and Microsoft seemed poised to capitalize on AI, while chipmakers creating the tools underpinning large language models experienced jaw-dropping stock surges. Nvidia ‘s blowout quarterly print this week only boosted the investment case for AI. GOOGL MSFT YTD mountain Alphabet and Microsoft so far this year Wall Street is just beginning to discern the investment potential of the big AI winners, with Goldman Sachs forecasting the technology as capable of generating $7 trillion in global economic growth over the next 10 years. But not every sector will benefit equally, and the nearly 50% selloff in online education provider Chegg on the heels of its quarterly earnings earlier this month illuminated the downside risk to AI and challenge it poses in some industries. Chegg CEO Dan Rosensweig said on a conference call earlier this month that interest in ChatGPT surged among students, a move the company believes is weighing on its new customer growth rates. Chegg looked like the first soldier to fall in the growing AI war, forcing Wall Street and the investing community to reconsider the downsides to this seemingly faultless technology and how it may jeopardize longstanding business models and lucrative revenue streams. CHGG 1M mountain Chegg shares over the last month The thinking now is that no part of the economy can hide from AI. Companies from manufacturers to popular retailers have begun embracing the technology to improve their products. But some companies face more danger than others, and steep challenges to overcome. Freelance market AI chatbots capable of generating content pose significant risks to the freelancing market as the bots improve, with the potential to replace the need for services connecting jobseekers such as Fiverr and Upwork . RBC Capital Markets analyst Brad Erickson highlighted in a recent note that AI could in fact lift these companies over the long haul and improve productivity, but argued AI concerns will likely pressure shares in the near term. “We generally agree with management’s comments on how AI is actually driving demand vs. more likely to displace it,…
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