Good morning, CIOs. AI's impact on search is starting to eat away at website traffic many businesses depend on, threatening to turn some parts of the information highway into a digital Route 66. 

Losing subscribers to AI-enabled rivals, online-education company Chegg on Monday announced plans to lay off about 22% of its workforce, or 248 employees, to cut costs and streamline operations, Reuters reports.

The company Monday referred to Google's AI Overviews feature for retaining search traffic that historically had come to it. "Additionally, language model companies are turning to academia for validation," Chegg said, referring to education offerings from OpenAI and Anthropic. 

Chegg's first-quarter revenue declined 30% to $121 million. Subscribers also declined 31% in the period to 3.2 million. 

Although Chegg built its own AI products, the company has faced scores of canceled subscriptions, the WSJ reported earlier this year. In February it filed a complaint in federal court against Google and its parent company Alphabet, alleging that they blocked traffic from coming to Chegg.

Of course, even the biggest players are not immune to AI's impact on search. More below.

Perplexity, maker of an AI-powered search tool, is in advanced talks for a new funding round that would value it at $14 billion, a more than 50% increase from late last year, the WSJ reports. Venture-capital firm Accel is set to lead the new round, which is expected to total $500 million, people familiar with the matter said.

The raise underscores investor enthusiasm for generative artificial-intelligence companies, some of which have begun to challenge Google’s search dominance. Last week, Apple executive Eddie Cue said that Google searches over the Safari web browser fell over the past two months for the first time in more than 20 years. He attributed the drop to more people using generative AI services.

The biggest U.S. tech stocks surged Monday after the White House backed down from imposing hefty tariffs on China. Under the temporary agreement, the U.S. will lower tariffs of 145% on Chinese goods to 30%. China will cut its retaliatory levy on U.S. goods to 10% from 125%

Apple rose around 6% by Monday afternoon. The iPhone-maker is the only megacap tech stock that still hasn’t fully recovered from its losses following President Trump’ tariff announcements. Chip stocks also rallied, with Broadcom regaining its market capitalization above $1 trillion for the first time since February. 

SoftBank Group reported its first annual profit in four years as it ramped up investments in artificial intelligence. The Japanese technology company recently agreed to lead a funding of up to $40 billion in OpenAI, valuing the ChatGPT maker at $300 billion. SoftBank inked a deal in March to purchase U.S.-based chip designer Ampere Computing for $6.5 billion.

A new insurance product from Lloyd’s of London is designed to cover damages caused by faulty or underperforming AI, FT reports. 

Marks and Spencer said hackers have stolen personal data from its customers through a cyberattack reported on April 22. The U.K. retailer on Tuesday said the data doesn’t include usable payment, card details or account passwords.

Theom, a startup that helps businesses safeguard and track sensitive data, raised $20 million in its latest investing round, drawing support from rival data platform giants Snowflake and Databricks, the company said Monday.

Amazon.com has added FedEx as a partner to deliver select large packages to homes for the online retailer, as the two companies find more ways to do business together after a previous split, the WSJ reports. The partnership comes after rival UPS earlier this year said it plans to phase out more than half the business it does with Amazon over the next 18 months.

OpenAI’s Sam Altman is bad at olive oil, the FT says.

President Trump arrived in Saudi Arabia to begin a four-day Middle East visit that will put the cold calculus of “America First” on full display: Invest great sums of cash into the U.S. economy and get a more engaged Washington in return. (WSJ)

Afrikaners, white South Africans long reviled as the architects of a racist state, are now being recast by Donald Trump as the victims of one. On Monday, several dozen Afrikaners arrived in the U.S., the first group granted refugee status under Trump’s executive order. (WSJ)

The National Federation of Independent Business said Tuesday that its optimism index, a gauge of sentiment among small firms, fell to 95.8 in April from 97.4 in March, keeping the index below the 98 mark that represents the long-term average for confidence among small companies. (WSJ)

UnitedHealth Group said Chairman Stephen Hemsley will return to running the healthcare giant he helped build, succeeding Chief Executive Andrew Witty. Effective immediately, Witty is stepping down for “personal reasons,” the company said. (WSJ)

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.