Duolingo's AI-first bet pays off, backlash fades
Language learning app Duolingo recently delivered a powerful message to the tech world: for a company focused on rapid expansion, financial success can seemingly outweigh public backlash. Despite facing widespread criticism for its aggressive pivot to an “AI-first” strategy that deprioritized human labor, the company announced it had surpassed its quarterly revenue estimates, sending its stock soaring by nearly 30%.
The strategic shift was unveiled in April when CEO Luis von Ahn declared Duolingo would become an “AI-first” enterprise. This meant a significant reduction in the use of contract workers and a general discouragement of new hires unless automation proved impossible for a given task. The rationale, according to von Ahn, was clear: generative artificial intelligence offered an unprecedented path to scale. Indeed, the immediate impact was tangible, with Duolingo introducing an astonishing 148 new language courses, more than doubling its previous content offerings. “Without AI, it would take us decades to scale our content to more learners,” von Ahn asserted at the time, emphasizing a perceived duty to deliver this content “ASAP.”
While a segment of Duolingo’s user base vocalized concerns that these AI-driven features were diminishing the app’s quality, the company’s financial performance painted a starkly different picture. Duolingo now projects its annual revenue to exceed $1 billion, a testament to its growth trajectory. Furthermore, daily active users saw a robust 40% year-over-year increase. This growth, while substantial, did fall towards the lower end of the company’s own projections, which had anticipated a 40% to 45% increase.
During a recent quarterly earnings call, an investor pressed von Ahn on this slight shortfall. The CEO attributed it directly to the initial public relations misstep surrounding the AI announcement. “The reason we came [in] towards the lower end was because I said some stuff about AI, and I didn’t give enough context,” von Ahn explained, acknowledging the subsequent social media backlash. To counter this, Duolingo swiftly adjusted its social media strategy, shifting away from “edgy posts” to content designed to foster a more positive sentiment, a tactic von Ahn claimed had proven effective.
Yet, despite the company’s efforts to mend its public image, a persistent undercurrent of criticism remains visible on platforms like TikTok. Top comments on Duolingo’s videos frequently target the company’s AI reliance, with snarky queries about the authenticity of content often met with cheerful denials like, “Nope. Made by our great team!” This ongoing public sentiment, however, appears to have had little to no material impact on Duolingo’s financial health. From the company’s perspective, the soaring revenue and user growth underscore a triumphant validation of its AI-centric gamble, proving that for now, the bottom line speaks louder than the online chorus.