Google, OpenAI ink $250M deal to support newsrooms across California
What's the story
The Newsom Administration, news publishers, and major tech companies—particularly Google and OpenAI—have struck a deal to block two state bills. The five-year deal, valued at $250 million, aims to financially support newsrooms across California and establish a "National AI Innovation Accelerator." This initiative will provide resources and other forms of assistance to newsrooms for AI experimentation in their operations.
Legislative impact
Agreement averts proposed state bills
The agreement effectively nullifies two proposed state bills, AB 886 and SB 1327. These bills aimed to compel tech platforms to share advertising revenues with news organizations and impose a tax on digital advertising revenue, respectively. The deal was reached just under two weeks before the deadline for both bills to be presented to the governor's desk.
Financial commitment
State funding and industry reactions
As part of the agreement, the Newsom administration will allocate $70 million from California's general fund. Assembly member Buffy Wicks (D-Oakland), who proposed AB 886, expressed her support for the deal to news organization KQED. However, state Senator Steve Glazer (D-East Bay) criticized the agreement for not addressing issues related to Meta and Amazon's data usage in advertising.
Fund management
UC Berkeley to administer 'News Transformation Fund'
The "News Transformation Fund," a product of this agreement, will be managed by the UC Berkeley School of Journalism. The fund's purpose is to distribute financial aid to state and local news organizations within California, especially those serving underserved communities and "news deserts." In the first year of the agreement, Google has committed to contribute $15 million annually into this new journalism fund.
Extra contributions
Google's additional commitments and industry support
In addition to the journalism fund, Google will also invest $5 million into the AI accelerator and $10 million toward current journalism grants. The agreement has garnered support from the California News Publishers Association, which represents over 700 member newsrooms. However, it has also faced criticism from groups like Free Press Action for not adequately addressing Silicon Valley's impact on journalism in California.