Duolingo's Stock Down 38%, Plummets After OpenAI's GPT-5 Language App-Building Demo (yahoo.com)
- Reference: 0178714410
- News link: https://yro.slashdot.org/story/25/08/17/194212/duolingos-stock-down-38-plummets-after-openais-gpt-5-language-app-building-demo
- Source link: https://finance.yahoo.com/news/duolingos-roller-coaster-week-highlights-a-crucial-risk-factor-to-companies-100042282.html
Yet "The backlash against Duolingo going 'AI-first' didn't even matter," [2]TechCrunch wrote August 7th , noting Duolingo's stock price surged almost 30% overnight. That surge vanished within two days — and instead of a 30% surge, Duolingo now shows a 5% drop over the last eight days.
Yahoo Finace [3]blames the turnaround on OpenAI's GPT-5 demo , "which demonstrated, among many other things, its ability to create a language-learning tool from a short prompt."
> OpenAI researcher Yann Dubois asked the model to create an app to help his partner learn French. And in a few minutes GPT-5 churned out several iterations, with flashcards, a progress tracker, and even a simple snake-style game with a French twist, a mouse and cheese variation to learn new vocab....
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> [Duolingo's] corporate lawyers, of course, did warn against this in its [4]annual 10-K , albeit in boilerplate language. Tucked into the risk factors section, Duolingo notes, "It is possible that a new product could gain rapid scale at the expense of existing brands through harnessing a new technology (such as generative AI)." Consider this another warning to anyone making software. [The article adds later that "Rapid development and fierce competition can leave firms suddenly behind — perceived as under threat, inferior, or obsolete — from every iteration of OpenAI's models and from the moves of other influential AI players..."]
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> There's also irony in the wild swings. Part of Duolingo's successful quarter stemmed from the business's efficient use of AI. Gross margins, the company said, outperformed management expectations due to lower AI costs. And AI conversational features have become part of the company's learning tools, helping achieve double-digit subscriber growth... But the enthusiasm for AI, which led to the initial stock bump this week, also led to the clawback. AI giveth and taketh away.
Meanwhile, this week a blog announced it was "able to activate a long-rumored Practice feature" hidden in Google Translate, [5]notes PC Magazine , with the blogger even sharing a screen recording of "AI-led features within Translate" showing its ability to create personalized lessons. "Google's take on Duolingo is effectively ready for release," [6]the Android Authority blog concluded . "Furthermore, the fact that [7]a Telegram user spotted this in their app suggests that Google is already testing this in a limited fashion."
Duolingo's CEO revisited the backlash to his original "AI-first" promise today in a [8]new interview today with the New York Times , emphasizing his hope that AI would only reduce the company's use of contractors . "We've never laid off any full-time employees. We don't plan to...." But:
> In the next five years, people's jobs will probably change. We're seeing it with many of our engineers. They may not be doing some rote tasks anymore. What will probably happen is that one person will be able to accomplish more, rather than having fewer people.
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> NYT: How are you managing that transition for employees?
>
> Every Friday morning, we have this thing: It's a bad acronym, f-r-A-I-days. I don't know how to pronounce it. Those mornings, we let each team experiment on how to get more efficient to use A.I.
Yesterday there was also a new announcement from attorneys at Pomerantz LLP, which calls itself "the oldest law firm in the world dedicated to representing the rights of defrauded investors."
The firm [9]announced it was investigating "whether Duolingo and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices."
[1] https://finviz.com/quote.ashx?t=DUOL&p=d
[2] https://techcrunch.com/2025/08/07/the-backlash-against-duolingo-going-ai-first-didnt-even-matter/
[3] https://finance.yahoo.com/news/duolingos-roller-coaster-week-highlights-a-crucial-risk-factor-to-companies-100042282.html
[4] https://investors.duolingo.com/node/10676/html#i5af9672d7de646f4b5ed8ffacc9917b2
[5] https://www.pcmag.com/news/heres-how-google-translate-might-take-on-duolingo
[6] https://www.androidauthority.com/google-translate-practice-duolingo-apk-teardown-3586649/
[7] https://t.me/GappsLeaksChat/67539?single
[8] https://www.nytimes.com/2025/08/17/business/duolingo-luis-von-ahn.html
[9] https://www.morningstar.com/news/globe-newswire/9510121/investor-alert-pomerantz-law-firm-investigates-claims-on-behalf-of-investors-of-duolingo-inc-duol
The AI is not the problem (Score:3)
The app is so laden down with ads and upsell gamification that it sucks. It's no wonder that people are losing interest in Duolingo as a learning platform because Duolingo have lost interest in themselves as a learning platform. They exist to serve ads and upsell. Learning? Not so much.
Re: (Score:1)
I don't know if AI is the problem, but Duolingo has awful language quality independent of upsell and gamification. Japanese might be a hard case because kanji have so many possible pronunciations, but a lot of the time the furigana don't match the audio. Other times, the audio playback has odd pronunciation, or the speech recognition doesn't pick up clearly enunciated morae.
And of course its focus on rote translation, with essentially zero explanation of grammar or usage, makes for poor proficiency.
Re: (Score:1)
What does Duolingo actually do? The summary here doesn't say.
Re: The AI is not the problem (Score:2)
Language courses.
Re: (Score:2)
Stock volatility is not related to ads or gamification. It shows how finance guys are crazy about this tech. One day do +30%because AI then 2 months later go -38% because AI. The app being good or not doesn't matter.
Why? (Score:3)
If I have a device that that can reasonably translate between two languages, in real time, why do I need to learn other languages?
Re: Why? (Score:4, Insightful)
A desire for self-improvement? Not to have a neon sign proclaiming you to be a tourist? Wanting to show your hosts a modicum of respect?
Re: (Score:1)
Being able to say Salam Alaykum doesn't mean I can read, nor speak Arabic usefully - yet that is taken as a sign of respect.
Re: (Score:2)
> A desire for self-improvement?
I can think of a thousand other ways I would seek out self-improvement besides learning another language. But maybe that's just me. I already have the ability to communicate in at least one language fairly well, so there are many other things I would rather learn than a parallel or alternative language to also communicate with.
> Not to have a neon sign proclaiming you to be a tourist?
Just how many languages and countries are we talking about here? There are quite a lot. Unless we're talking about permanent residency, in which case you will learn the language faste
Re: (Score:2)
There ARE decent arguments. Different languages facilitate different ways of thinking. (The weak form of the Whorf hypothesis. Pretty clearly true, just as the strong form is probably false.)
OTOH, you won't get that benefit from a quick course. It probably requires years of immersion.
Re: (Score:3)
>> A desire for self-improvement?
> I can think of a thousand other ways I would seek out self-improvement besides learning another language. But maybe that's just me.
probably not just you, but the fact that you don't understand what's so special about learning other languages shows what you are missing out on here, quite common for monolinguals. as someone said "language is the straitjacket of thought". when you learn a new language you also learn a new way of thinking, of understanding, a new perspective of reality, you experience a different culture. this is liberating and fullfilling because it lets you step out of your old straitjacket, it makes it larger. the poten
Re: (Score:2)
Because you want to talk to people. And because you want to understand the nuances of the language.
None of this stuff works with Chinese or Japanese books that aren't just technical books as an example. Especially chinese. AI also still struggles with Chinese a lot of the time when it's not just really basic.
Lost 8 months of gains (Score:2)
a 38% loss in value sounds catastrophic, but at the moment, it's still at $327 which is a value it never reached for the first time until last November (2024).
Of course it could still get worse. Or, it could get better. It started the year at $340, which is only 4% down on the year so far. (After more than doubling last year).
Re: (Score:2)
I'm not sure why it would get better. Once AI can replace your primary business for free or nearly free without the annoyances that are inserted to generate additional revenue, I would think that your days are well and truly numbered.
Queer stories (Score:1)
The app went downhill when it interjected queer relationships into the study material. Who wants to fuck whom is not relevant to learning a language.
Re: (Score:2)
Ask yourself why the relationship between two peoples in the language learning content matters to you?
That is a hell of a lot of jobs (Score:2)
That are just going to go away. Not just Duolingo but a whole ton of stuff that gets translated.
I can tell you it's not perfect yet though. It is stupidly obvious when Crunchyroll uses AI subs. The AI will also try to sub damn near anything text so that random background text will end up getting subtitled and obstructing everything.
Re: (Score:2)
It's not clear to me, though, that GPT5 is good enough. OTOH, I'm going off second and third (or more) hand reports.
That said, there are already definite use cases, and those will only increase. The question is "how quickly?". I wouldn't want to play John Henry vs. the steam drill, but many seem anxious to do just that.
Automatic Language Growth may be better (Score:2)
Look here: [1]https://beyondlanguagelearning... [beyondlang...arning.com]
Basically, the concept is that the best way to learn a language is the way you learned your first language as a baby.
Step 1: Spend months learning the language without speaking it. You only listen and watch other people speak it. You should not be trying to speak it or even thinking about it. his teaches you the actual words and sounds without letting you build in mistakes because you never try to say a word until you have heard it so many times you know the pr
[1] https://beyondlanguagelearning.com/automatic-language-growth/
Their algorithms were mental (Score:2)
Trying to learn Italian I thought I was doing OK and after some success in buying metro tickets in Rome persevered with Duolingo until it started asking me to translate "the elephant is coming to lunch".
That's plain weird.
You don't say. (Score:2)
Oh dear.
What a shame.
Never mind.