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Chegg, the US-based education company, is cutting 22 percent of its workforce—about 250 jobs—as more students turn to free AI tools like ChatGPT, which are replacing traditional educational services. In the first quarter, Chegg's subscriber count dropped 31 percent to 3.2 million, and revenue fell 30 percent to $121 million. As part of the restructuring, Chegg plans to close its offices in the US and Canada by the end of the year and reduce spending on marketing, product development, and administration. The company expects the changes to save up to $55 million in 2025 and as much as $110 million in 2026. Restructuring costs are projected to be between $34 and $38 million. In February, Chegg filed a lawsuit against Google, claiming that Google's AI search results are drawing away users.

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Perplexity, the AI startup known for its generative search engine, is reportedly close to raising $500 million in a new funding round that would value the company at $14 billion. That marks an increase of more than 50 percent since the end of 2024, according to the Wall Street Journal. Venture capital firm Accel is expected to lead the round, with partner Sameer Gandhi likely joining Perplexity's board. Perplexity offers a search engine powered by generative AI that returns direct answers with sources instead of traditional lists of links. The company is also developing its own web browser, Comet, and has released an AI assistant for smartphones. Perplexity competes with Google's AI Overviews, ChatGPT's search, and has faced criticism from publishers like the New York Times.

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For the first time, insurers in London’s Lloyd’s market are offering dedicated policies that cover damages caused by errors from AI chatbots. The product was developed by Armilla, a Y Combinator-backed startup, and is designed to protect companies if they get sued over faulty AI performance—such as when customers are harmed by incorrect answers or so-called "hallucinations" from a chatbot. The coverage includes legal fees and compensation payments. A recent example comes from Air Canada, where a chatbot promised a nonexistent discount that the airline later had to honor. According to Armilla, the new policy would have applied in such a case if the bot’s performance fell significantly below expectations. Karthik Ramakrishnan, Armilla’s CEO, says the goal is to make it easier for businesses to adopt AI. Traditional tech insurance often offers only limited coverage for AI-related risks, but Armilla’s policy specifically insures against performance drops in AI models.

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