Google (GOOGL) has struck a rare partnership with California to support journalism across the state. The first-in-the-nation agreement, announced yesterday (Aug. 21), will see the Big Tech player invest around $170 million over the next five years to strengthen a struggling local media landscape and aid in experimentation with A.I. However, the seemingly well-intentioned deal met controversy from media industry members.
The deal comes as lawmakers push for Big Tech companies to compensate news organizations. In recent decades, news organizations have suffered from dwindling ad revenue as advertisers and readers transition away from print to social media platforms and search engines. The journalism industry in the U.S. has lost nearly two-thirds of its reporters since 2005, according to a 2023 study from Northwestern University. Each week, two and a half local newspapers closed down, the study found.
Under the new agreement, a total of $250 million in public and private funding will be funneled into initiatives encouraging the local sustainability of outlets. “This agreement represents a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism across California—leveraging substantial tech industry resources without imposing new taxes on Californians,” said California Governor Gavin Newsom in a statement.
In addition to continuing to dole out annual grants of $10 million to existing journalism programs it supports, Google will give $55 million over the next five years to a new fund that will be administered by the Graduate School of Journalism at the University of California, Berkeley. Known as the News Transformation Fund, it will distribute funding across California publications and emphasize underrepresented groups and news deserts.
The search engine giant is also expected to pour $12.5 million each year into a new National A.I. Innovation Accelerator, a program that will be administered with a private nonprofit and provide resources to experiment with A.I. across a variety of industries. Both of the agreement’s initiatives are expected to go live in 2025. “California lawmakers have worked with the tech and news sectors to develop a collaborative framework to accelerate A.I. innovation and support local and national businesses and non-profit organizations,” said Kent Walker, chief legal officer for Google’s parent company Alphabet (GOOGL), in a statement.
A questionable approach to saving journalism
Google has previously fought more comprehensive proposals in California urging Big Tech companies to support news outlets. In response to a proposed bill that would have seen Google forced to pay outlets for surfacing their content, the company earlier this year described the solution as the “wrong approach to supporting journalism” and one that would lead to “uncapped financial exposure,” with the company even temporarily removing links to California news outlets from its search engine.
Not everyone is pleased with the new agreement. The Media Guild of the West, which represents journalists across Southern California, described the partnership as an “undemocratic and secretive deal with one of the businesses destroying our industry” in a statement. In addition to taking issue with Google’s financial commitment, it described the A.I. accelerator project as embracing an initiative “that could very well destroy journalism jobs.”
The threat of A.I. has been a key worry in recent years for news outlets concerned about its misuse of content and potential to replace jobs. A.I. companies have attempted to dissuade such fears by entering into partnerships with media companies, such as those struck between OpenAI and brands like Vogue, Time Magazine and The Wall Street Journal that see the startup compensate outlets in order to use their content in A.I. tools and to train models. Perplexity AI, an A.I.-powered search engine, also recently launched a revenue-sharing model that will offer publishing partners a portion of ad revenue when their material is used in its A.I. tool’s responses.
