CHGG - shorts are building into the AI news instead of covering. what do they see?

Most CHGG threads are stuck arguing about the cash and the balance sheet. I want to talk about the AI side instead, cause I think that's where the real disagreement is and nobody's actually digging in.

So they spun up a team for this, AI Services, with its own GM. The guy came back to Chegg specifically to build it, and apparently they'd been working on it quietly for months before saying anything. What they sell is their pile of expert-checked, step-by-step STEM solutions, licensed to AI labs as training data, plus their experts grading and training models. Same data Scale and Surge are worth billions for.

The GM saying it's beyond simple data labeling. They're going after the hard reasoning stuff, the problems frontier models still get wrong, which is the part labs actually pay up for. And he says, present tense, they're already working with some of the Magnificent Seven on their next models. Already happening, not a someday thing.

Here's what I can't square though. The short data doesn't match that story at all.

Not a squeeze, before anyone gets excited. Borrow normal, SI only 7% of float, score I ran is 17/100. Nothing trapped here. But shares short are the highest in months and days to cover is up 26% over 90 days. So shorts are adding, not covering. Caveat that the SI number lags a couple weeks so it's not perfectly clean, but the trend's been climbing for a while now.

Which is the interesting part imo. Either they think the AI thing is a press release that never becomes revenue (fair, given Chegg's history), or they're still short the dead homework story and haven't repriced the new one. If it's the second, an actual contract print hits them on fundamentals, no squeeze needed.

So idk, I'm genuinely split. AI demand looks real and it's the biggest buyers out there. The shorts look confident and they're not dumb money. One of them's wrong, just can't tell which yet.

And honestly the squeeze angle kind of misses the bigger thing. People still talk about Chegg like it's one dying business, but it's three things now. The old learning product everyone's busy burying. Skilling, which is the Busuu language stuff plus corporate upskilling, going after a market somewhere around $40B. And now AI Services on top. Shorts are basically betting the first one goes to zero and acting like the other two aren't there. Maybe they're right and the core drags it all down. But that's a way harder short to hold than just "Chegg fades again," and I don't think half the people piling in have thought about which one they're actually short.

So yeah. What's the actual bear case that isn't just "it's Chegg, it always fades"? If the revenue shows up, why doesn't it matter?