Unanswered Questions Surrounding California’s Local News Deal with Google: Impact on AI and New Jobs
Early this summer, California seemed poised to play a leading role in shaping a new frontier of tech regulation as lawmakers considered bills to force big digital platforms to pay local news. The legislation, which would have been a first in the United States, advanced in Sacramento as newspapers struggle with precipitous decline and Google battles in federal court over claims that it violated antitrust laws by illegally maintaining a monopoly on web searches.
But over a few weeks in August the push for legislation fell apart. Google lobbied hard against the California Journalism Preservation Act, which would compensate news outlets for articles that show up in search results. Division among news outlets was rife as some smaller publishers feared it would disproportionately benefit big legacy publications. And Gov. Gavin Newsom had made no public commitment to signing a bill.
Now, weeks after Assemblymember Buffy Wicks (D-Oakland) dropped the legislation in favor of a nonbinding agreement between Google and the state, numerous questions remain unanswered about how it will work. A bare-bones framework of an agreement, sketched out on a single sheet of paper, the deal promises $125 million for a journalism fund that will be parceled out to local newsrooms over five years.
But nothing stops Google from walking away from its commitment to $55 million if the state doesn’t come through with its share of the money. State funding of $70 million depends on approval from legislators and Newsom, and the governor may require companies to spend the money on new hires, a position many publishers probably will resist. UC Berkeley is supposed to administer the fund, but its leaders want more assurance from the state that the fund will transform local news — and a stake in how it is run.
Meanwhile, publishers are pushing for more journalistic oversight of an additional part of the deal — Google’s $62-million payment for a new but ill-defined “AI accelerator” — arguing that it could result in job losses if tech controls the board. Some journalists and publishers say the deal is better than nothing. But many are disappointed that California — a state that prides itself on passing innovative, progressive laws — ultimately bailed on taking on Big Tech.
### Impact on AI in Journalism
With the bill dead, fierce divisions emerged over the amount of money Google would pay, the makeup of the board that would administer funds and the lack of journalistic oversight over the AI portion. The California News Publishers Assn. pushed back against the idea of Google paying $62 million into an “AI accelerator” program managed by a nonprofit “under terms to be defined by founders.” A separate $5 million would go to an AI fund for journalism.
Some journalists and publishers believe that AI could be a powerful tool to help reporters sort through meeting recordings or identify misinformation. But they argue that Big Tech is already ahead in AI development, and publishers urgently need AI tools to compete. However, the lack of clarity and control over how the AI accelerator program will be implemented raises concerns about potential job losses in the journalism industry.
### Negotiations and Compromises
Over the last two decades, Silicon Valley has developed wildly successful search and social media sites that have fundamentally disrupted the financial model of journalism. As the new platforms gobbled up digital advertising, the state has lost about two-thirds of its newspaper journalists. The problem isn’t confined to California. After Australia and Canada crafted deals to get tech to pay news outlets, Wicks looked to Canada as a model for her legislation.
Wicks joined forces with state Sen. Steve Glazer (D-Orinda) on a separate bill that would impose a data-mining fee on tech companies, forcing them to pay $500 million a year. In June, both bills advanced in the Capitol. Around the same time, Wicks spotted red flags in Canada. A year after the government there forced Google to pay $74 million a year, publishers had yet to receive the money. Some complained they were no better off, or in a worse position, after Google canceled preexisting financial deals and Meta stopped distributing news on Facebook and Instagram.
### The Future of Local News
When the deal was finally announced Aug. 21, Newsom hailed it as “a major breakthrough in ensuring the survival of newsrooms” — one that would “support hundreds of new journalists.” Yet nothing in the framework requires hiring new journalists. If that becomes a requirement, it’s not clear how newsroom managers facing massive deficits would retain existing journalists. Another uncertainty surrounds UC Berkeley’s role.
Wicks said she supports state funding for UC Berkeley’s news fellowship and is open to extending an opportunity for the university to join the fund’s governing board. She also said she intends to tighten the parameters of the “AI accelerator” fund to ensure it would “help build tools to help and to augment, not to replicate or replace.” Some remain dubious.
The fight over Big Tech’s role in the decline of local news will continue next year in Sacramento: After Newsom presents his budget in January, advocates will pack hearings again as legislators grapple over state funding. Beyond California, the battle will shift to Illinois and other states and a broader federal move to regulate Big Tech. “This is the beginning,” Wicks said. “Not the end.”
