Chegg Inc. is considering strategic alternatives for its business, citing a significant drop in traffic to its web-based education platform following Google’s launch of an AI-powered summary tool. The company has filed a lawsuit against Google and its parent company, Alphabet Inc., alleging unfair competition due to the Google AI Overviews product. Chegg CEO Nathan Schultz stated that the company would not need to review strategic alternatives if Google hadn’t launched AI Overviews, as traffic is being blocked from reaching Chegg due to Google’s use of Chegg’s content on its own platform. Chegg shares fell 21% in premarket trading, marking one of the worst performances in the Russell 3000 Index. The stock has lost about 95% of its value since the introduction of OpenAI’s ChatGPT tool in 2022. Chegg’s lawsuit claims that Google’s conduct threatens to create an unrecognizable internet experience, with users receiving synthetic, error-ridden answers and never leaving Google’s platform. Website publishers have complained that Google’s dominance in search, ruled an illegal monopoly by a federal court last year, gives it an advantage in the AI wars. Google spokesperson José Castañeda stated that AI Overviews make search more helpful and create new opportunities for content discovery, sending traffic to a greater diversity of sites. Chegg also reported a first-quarter sales outlook that missed consensus expectations, with non-subscriber traffic plummeting to negative 49% in January 2025. The lawsuit was filed in Washington DC, where a federal judge ruled last year that Google has illegally monopolized the online search market. The Justice Department has asked the court to impose conditions on Google, including limits on its AI-related acquisitions and more fulsome opt-outs for websites from Google’s AI products. The lawsuit by Chegg is the latest by smaller tech companies following last year’s landmark antitrust ruling against Google. Online review site Yelp Inc. also sued the search giant for alleged antitrust violations last year.