What happened
Shares of Fiverr International (FVRR 0.26%), Upwork (UPWK -0.67%), and Wix.com (WIX 0.02%) all fell today for the second day in a row as investors continued to respond to the threat from ChatGPT.
Yesterday, shares of education stock Chegg (CHGG -3.01%) crashed by nearly 50% after it said that new customer growth had slowed due to competition from OpenAI's chatbot.
That sparked a sell-off in other stocks that also seem to be at risk from competition from ChatGPT including Fiverr, Upwork, and Wix.
While Chegg actually recouped some of its losses from yesterday, the three tech platforms above all fell again with Fiverr losing 9.7%, Upwork giving up 7.5%, and Wix closing down 10.8%.
So what
Fiverr is a freelance hiring platform that connects employers with freelancers looking for jobs doing things like content creation, copywriting, and coding, all tasks that ChatGPT does.
There have already been signs that ChatGPT is disrupting some of what Fiverr does as employers have complained that they have seen identical project proposals from freelancers using ChatGPT, and freelancers on Fiverr have also expressed concerns that their work could be replaced by ChatGPT and other generative AI technologies.
Upwork is another freelancer marketplace that seems at risk of disruption from ChatGPT.
A number of Upwork employers have complained about freelancers using ChatGPT for work they claim to be their own, while freelancers are also fearful of losing employment to the new technology.
ChatGPT has already put a number of jobs in jeopardy, including in areas like content writing and coding, so it makes sense that platforms that specialize in outsourcing that kind of work are feeling the heat from Chegg's revelation yesterday.
Upwork reported earnings after hours, and the company said that the number of search queries for generative AI has surged, a sign that ChatGPT's innovation could be an opportunity as well as a risk. It also said job posts related to generative AI were up more than 600% compared to the fourth quarter of 2022.
Upwork called generative AI a "force-multiplying tool for talent and a cost-saving advantage for clients," a sign management sees it as an opportunity. Nonetheless, the stock fell by double digits in after-hours trading due to weak guidance as management cited a difficult macroeconomic environment.
Wix isn't a freelancer hiring platform. It's a website development platform, and it also has some exposure to the threat from ChatGPT.
Wix is a no-code platform for web design, but ChatGPT's coding could compete directly with it or siphon away some of its business as the chatbot is also capable of designing websites. Wix has integrated some components of ChatGPT, adding an AI Text Creator to help users build on their websites, and GPT technology is likely to play a bigger role on Wix and in web design, though that could also jeopardize Wix's position in the web design market.
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Notably, Wix rival SquareSpace was also down double digits today.
Now what
None of these companies seem as threatened currently as Chegg by the new generative AI technology, but it's still very early.
Upwork's comments might offer some encouragement to investors, as AI does present an opportunity for all three of these stocks in addition to a risk.
Look out for more commentary from these companies as Fiverr is set to report earnings next week and Wix is due out the following week. Investors are clearly anticipating news of any impact from ChatGPT, and these stocks are likely to be volatile as the issue develops.