Google, Meta, Microsoft & other tech companies to fund news reporting, AI research in California

California will become the first state in the US to channel both taxpayer money and contributions from tech companies into journalism and artificial intelligence (AI) research, following a landmark agreement announced on Wednesday.

The deal, which marks a significant development in the intersection of technology and media, will see the state and tech giants collectively contribute approximately $250 million over the next five years to support news organisations based in California and to establish an AI research program.

This initiative is scheduled to begin in 2025, with an initial investment of $100 million. The majority of this funding is earmarked for news organisations.

The deal aims to provide crucial financial support to local journalism, which has been struggling in recent years, while also fostering AI research that could have far-reaching implications for the industry.

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Governor Gavin Newsom emphasised that this agreement represents a significant step forward in safeguarding the future of journalism in California. By leveraging resources from the tech industry without imposing additional taxes on Californians, the deal aims to revitalise local newsrooms and rebuild a robust California press corps.

The governor highlighted the importance of journalism in a functioning democracy and expressed confidence that this initiative would help ensure its survival in the state.

The agreement effectively concludes a prolonged conflict between California lawmakers and tech companies, sparked by a proposal from Assembly member Wicks. Her initial bill sought to mandate that companies like Google, Facebook, and Microsoft pay a percentage of their advertising revenue to media outlets for linking to their content.

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This proposal, modelled after similar legislation in Canada, faced staunch opposition from the tech industry. Over the summer, tech companies launched advertising campaigns to discredit the bill, and Google even temporarily removed news sites from search results for some users in an effort to pressure lawmakers to abandon the proposal.

Wicks described the partnership as a groundbreaking cross-sector commitment to sustaining a free and dynamic press in California. She sees this agreement as a first step towards empowering local news outlets to continue their essential work, ensuring that journalism remains a vital part of the state’s social fabric.

California has been grappling with the rapid decline of journalism jobs, a trend that has accelerated as traditional media companies struggle to adapt to the digital age. Since 2005, more than 2,500 newspapers have closed across the US, according to Northwestern University’s Medill School of Journalism. In California alone, over 100 news organisations have disappeared in the last decade, highlighting the urgent need for intervention.

The agreement has received backing from key players, including the California News Publishers Association, which represents more than 700 news organisations, Google’s parent company Alphabet, and OpenAI. However, the deal has also drawn criticism from some quarters. Journalists, particularly those associated with the Media Guild of the West, have expressed concerns that the agreement could harm California’s news organisations rather than help them.

State Senator Steve Glazer, who previously proposed a bill to offer tax credits to news organisations for hiring full-time journalists, argued that the agreement undermines efforts to find a long-term solution for saving independent journalism.

Senate President Pro Tempore Mike McGuire also shared his concerns, saying that while tech platforms continue to enjoy substantial profits, newsrooms across California have been decimated. He questioned whether the funding and measures outlined in the deal would be sufficient to address the deep-seated challenges facing the industry.

As California moves forward with this pioneering initiative, the success of the agreement in supporting journalism and advancing AI research will be closely watched, both within the state and beyond.