Thanks to a deal between the tech giant and state legislators, Google is investing millions of dollars in California newsrooms. For the deal, California took cues from other governments that are trying to press tech companies into funding the journalism companies whose efforts they profit from.
It’s part of a global effort to reverse the decline of the journalism industry, which has suffered significantly as once-regular readers have turned to online platforms for their news and commentary. The loss of subscription and advertising money has left old-fashioned newsrooms strapped for revenue, even as their work benefits tech companies like Google.
However, California’s deal includes one particularly controversial provision that has drawn harsh criticism from the same journalists that the deal is meant to benefit. The agreement between California and Google earmarks a portion of its funding to be spent on artificial intelligence. Many journalists—who worry that AI could be used to replace their jobs—have voiced their reservations.
A $250 Million Deal, But How Much Goes to Journalism?
The deal will see Google and the state of California jointly contributing money to a “News Transformation Fund” over a period of five years. The fund, housed at UC Berkeley’s journalism school, will see Google contribute $110 million and California contribute $70 million to fund initiatives in journalism but will also include a further $70 million in private funding for the development of artificial intelligence tools.
Assemblymember Buffy Wicks explained in interviews that the AI money will be invested through a nonprofit that has not yet been established. Wicks characterized the AI investment, which she called a “National AI Accelerator,” as just a small piece of negotiation that is meant to create AI solutions to problems in multiple industries, including the journalism industry. She pointed to the CalMatters Digital Democracy program, which uses AI to track state legislation, as an example of one such solution.
Other area legislators have reacted to the deal with skepticism. “We have concerns that this proposal lacks sufficient funding for newspapers and local media and doesn’t fully address the inequities facing the industry,” said Mike McGuire, California Senate President Pro Tem.
Another legislator, Senator Steve Glazer of the Bay Area, said that Google’s contribution was “completely inadequate.” Glazer has authored a bill that is also meant to sustain the local journalism industry by taxing digital ad revenue. He went on to warn that the compromise on AI development “undercuts our work towards a long-term solution.”
Resistance From Tech Companies and News Unions
Google went to extremes to fight the deal, spending more than $1 million on an ad campaign that branded the bill a “link tax” and later undertaking another ad campaign that claimed the bill would reduce access to reliable information online. Google went as far as to temporarily block news access for some Californians. This was a measure they had also taken to combat similar measures in Australia and Canada. For over a year, tech industry business lobbyists worked to force compromises in both Wicks’ and Glazer’s bills. The AI development fund seems to have been the compromise that allowed Wicks’ bill to succeed.
Now, journalist unions have come out against the bill. The Media Guild of the West, which had previously been a supporter of Wicks’ bill, is now characterizing it as a favor to Google. “This was just a total rout,” said Matt Pearce, President of the Media Guild of the West and a former LA Times reporter. “Google used its monopoly power and held the line.”
“I think I’m dealing with the art of the possible,” said Wicks, who issued a response that, while she has respect for the journalist unions, she felt that she had found the best possible compromise. “This represents, to me, the best-case scenario for the moment we’re in. And I would rather take a nearly quarter of a billion dollar deal than nothing.”
