School's out for summer, and if ChatGPT usage is falling because students are off, that's a bad sign for OpenAI

• ChatGPT usage recently fell. Techies are wondering why.
• One theory: Students are on summer break and don't need the chatbot right now.

You are not hallucinating. ChatGPT usage has fallen.

This narrative violation has been the talk of the tech world ever since Similarweb and others reported some pretty shocking numbers earlier this month:

• Worldwide desktop and mobile web traffic to the ChatGPT website, chat.openai.com, dropped 9.7% from May to June, according to preliminary estimates.
• In the US, the month-over-month decline was 10.3%.
• Worldwide unique visitors to ChatGPT's website dropped 5.7%. The amount of time visitors spent on the website was down 8.5% in May.
• Churn rates, which measure the percentage of users who stop engaging with a service, have also spiked into the 20% range for ChatGPT, Bernstein Research found.

ChatGPT is supposed to be the fastest-growing tech product in history, so this apparent reversal got the technosphere theorizing as to why the chatbot ain't so hot anymore.

One hypothesis stood out: Millions of students went on summer break recently, so they don't need ChatGPT right now to cheat — er, I mean research.

At first blush, this doesn't seem like a disaster. Students will return to school in the fall and log back on to have ChatGPT write their essays and generally do thinking for them. Usage will recover, and the generative AI rocketship will resume its upward trajectory to infinity and beyond.

There's another interpretation, though

If waning usage is caused by students on break, that's a bad sign because it suggests there's a smaller range of use cases for ChatGPT and other AI-powered chatbots, says Mark Shmulik, a top internet analyst at Bernstein.

"If it's school kids, that's a real yellow-red flag on the size of the prize," he told me this week. "This idea that if the ChatGPT drop-off is due to students on summer break, that implies a narrower audience and fewer use cases."

In other words, if a big part of ChatGPT growth is driven by cheating students, this means the technology, or at least the chatbot format, may not be the dominant computing platform of the future.

Shmulik is a huge fan of this technology, but he's particularly perturbed by rising churn data.

"The ChatGPT chart shows what happens when you run out of new users and existing users churn out," Shmulik added.

It's not all about chatbots

I asked OpenAI, the creator of ChatGPT, about all this on Thursday. I also pinged a spokesman for Microsoft, which is a major backer of OpenAI. OpenAI didn't respond. The Microsoft representative declined to comment.

Whatever the reason for this ChatGPT dip, it does show that generative AI and large language models (LLMs) are not just about chatbots. There's so much more going on with this incredible new technology.

OpenAI provides access to other versions of its huge AI models for developers and companies to use in a host of new and interesting ways. Traffic to OpenAI's developer platform website was up 3.1% from May to June, according to Similarweb.

Microsoft's Bing.com search site, which incorporates some of OpenAI's technology, saw an increase in visits in June vs. May, according to Similarweb data.

Final thought from Garry Tan, one of the most successful tech investors in Silicon Valley:

"Personally I am short chat interface and long on SaaS and Enterprise implementations that use LLMs," he tweeted recently. "These new startups will perform extraordinary tasks that make a big difference in lowering cost or solving previously unsolvable problems and create new markets in the process."

Want to chat with a human? Email me: abarr at insider.com