What's up: Elon Musk's xAI sues OpenAI and Apple; Trump threatens tariffs on countries that tax tech; AI search startup Perplexity proposes revenue-share model with publishers.

Good morning. There’s new evidence that AI is profoundly limiting some young Americans’ employment prospects. This creates an obvious challenge for young people entering the workforce, but it’s no less of a problem for companies that bear much of the responsibility for rethinking the way people learn and work.

On one level, companies benefit by lowering entry-level labor costs in areas such as software development and customer service that lend themselves to automation. Yet it isn’t that simple. They also need to figure out how to train the next generation of people who will join older and more experienced workers with skills that aren’t so easily automated, at least for now.

That requires a recognition of the challenge, and a concerted effort to develop new approaches to education, onboarding, mentoring and training, as well as the rethinking of job roles.

A changing labor market. “There’s a clear, evident change when you specifically look at young workers who are highly exposed to AI,” Stanford economist Erik Brynjolfsson told the WSJ. He conducted the research with Bharat Chandar and Ruyu Chen.

The research, which hasn’t been peer reviewed, uses records from paycheck processor ADP. That data includes detailed information on workers’ ages and occupations, making it far more comprehensive than the survey of households the Labor Department uses for its monthly employment report, the WSJ said.

“After late 2022 and early 2023 you start seeing that their employment has really gone in a different direction than other workers,” Brynjolfsson said.

Among software developers aged 22 to 25, head count was nearly 20% lower this July versus its late 2022 peak. For workers aged 26 to 30 head count was close to flat, while among older workers it continued to grow, the WSJ said.

Older workers aren’t off the hook. “Artificial intelligence is going to replace literally half of all white-collar workers in the U.S.,” Ford Motor Chief Executive Jim Farley told author Walter Isaacson at the Aspen Ideas Festival earlier this summer. “AI will leave a lot of white-collar people behind.” Leaders at JP Morgan Chase, Amazon and Anthropic have issued AI-related job warnings, too.

Rethinking work. “Some corporate leaders are drawing up plans to consolidate roles further, blurring the jobs of a product manager and software engineer into one position at technology companies, for example,’ the WSJ reported in early July.

Workers mostly learn through experience, with the remainder coming from relationships and development, Chris Ernst, chief learning officer at Workday, told the WSJ in late July. As AI chips away at the opportunity to gain experience, Ernst said “employers must be intentional about connecting young workers with colleagues and making time to mentor them.”

Pipeline operator Williams this year started a two-day onboarding program in which veteran executives teach new hires business fundamentals, Chief HR Officer Debbie Pickle told the WSJ. Even so, Pickle said, increased efficiency will allow the company to expand while keeping head count flat.

How is your company preparing for the future work as AI takes on more tasks? Use the links at the end of this email and let us know.

Already the administration is looking to deploy sanctions against the European Union for new digital laws that call upon tech companies to do more to tackle hate speech and other illegal content on their platforms, Reuters reports.

And earlier this year, he threatened higher tariffs on Canada, forcing it to back away from a digital tax proposal, and initiated a tariff investigation in response to Brazilian tech laws.

It cuts both ways. Businesses have cheered the Trump administration’s decision to allow the free flow of semiconductors. But if he follows through and wields U.S. chips as a weapon in trade discussions, he could create more uncertainty for tech companies, the WSJ notes.

Elon Musk’s artificial-intelligence startup xAI sued Apple and OpenAI Monday, alleging that a partnership between the two companies makes ChatGPT the “only generative AI chatbot that benefits from billions of user prompts originating from hundreds of millions of iPhones.”

The suit also says Apple is deprioritizing the apps of competing chatbots in its App Store rankings.

Apple did not immediately respond to a request for comment, but OpenAI, already battling Musk in court over efforts to convert into a for-profit company, did respond:  “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment,” an OpenAI spokesman said.

The startup's business model has landed it in trouble in the past. Last year, Wall Street Journal parent Dow Jones and the New York Post, both part of News Corp, sued Perplexity for copyright infringement. More recently Japan's Nikkei and the Asahi Shimbun Co. sued the startup, Bloomberg reports.

Saudi AI startup Humain Chat announced a new AI chat app capable of working with multiple Arabic dialects as well as Arabic/English conversations and trained on Islamic values, Bloomberg reports.

Think your organization faces challenges keeping up with the speed of new AI developments? The Information looks at tech startup-land, where sometimes the only thing scaling is the anxiety many founders and investors face about being left behind. 

Thoma Bravo has agreed to buy call center software company Verint for $2 billion, or $20.50 a share, in an all-cash transaction, WSJ reports.

CORRECTION: Google said that the energy required to power a median Gemini text prompt decreased by 97% in the past year. An earlier version of this article summarized in Friday’s Morning Download incorrectly said that the energy used to power a median Gemini text prompt is 33 times less today than it was 12 months ago.

A senior Chinese trade negotiator is heading to Washington this week for what is expected to be the first dialogue in the U.S. capital, according to people familiar with the matter, as both sides seek to establish regular communication during an extended tariff truce. (WSJ)

President Trump said he is removing Lisa Cook, a Joe Biden-appointed Federal Reserve governor, citing allegations that Cook submitted fraudulent information on mortgage applications. (WSJ)

Illinois Democratic Gov. JB Pritzker promised to challenge President Trump’s plan to deploy the National Guard to the nation’s third-largest city, calling the move unconstitutional and un-American. (WSJ)

A federal judge in Maryland temporarily blocked the Trump administration from attempting to re-deport Kilmar Abrego Garcia, the man it had mistakenly sent to a mega-prison in El Salvador and then returned to the U.S. and charged with human smuggling. (WSJ)

This September, The WSJ Technology Council will convene senior technology leaders to examine how AI is reshaping organizations—redefining teams and workflows, elevating technology’s role in business strategy, and transforming products and services. Conversations will also delve into AI’s evolving security risks and other fast-emerging trends shaping the future.

Select speakers include:

Carolina Dybeck Happe, COO, Microsoft
Severin Hacker, CTO, Duolingo
Yang Lu, CIO, Tapestry
Tilak Mandadi, CTO, CVS Health
Helen Riley, CFO, X, Google's Moonshot Factory

September 15-16 | New York, NY
Request an invitation | Participants and program

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.