Hello there and welcome to another installment of BLOOD IN THE MACHINE, the newsletter about the people the future is happening to. It’s free to read, so sign up below. It is, however, an endeavor that takes many hours a week. If you find this valuable, it would mean a great deal if you became a paying subscriber, so I don’t have to go get a job at another billionaire-owned media outlet that is going to do mass layoffs in another 4 months anyway. Chipping in a few bucks a month allows me the resources to continue and, ideally, expand said work. As always, cheers, and keep those proverbial hammers at the ready.

Man, I really wanted to write about the ‘Alien’ films this week. I saw ‘Alien: Romulus’ on opening day, and I have some *thoughts*. But the Guardian called and asked me to write a thing about the deepening bond between Donald Trump and Elon Musk, and then all hell broke loose with the California Journalism Preservation Act, a bill that some of my colleagues and had worked to pass for nearly two years, and so, I guess the xenomorphs will have to wait.

Because California’s effort to reign in big tech and revive local journalism is dead, and a zombified version that funds a mysterious AI program has risen in its place.

In short, before anyone really knew what was happening, the CJPA, a bill that was intended to provide much-needed structural relief for local journalism and place a serious check on Google’s monopoly power, and that had passed both California legislative bodies with supermajority and bipartisan support, wound up getting gutted and replaced by a weird backroom deal between Google, legislators, and major news publishers—without any actual journalists involved in the process. The deal effectively transformed legislation with real teeth into a 5-year “public-private partnership” that, for a reason that no one has yet been able to explain, includes millions in funding for an “AI accelerator.” It’s a disaster.

The CJPA was designed to make tech giants like Google and Facebook share with publishers a small portion of the revenue they make when they profit from hosting stories produced by California journalists on their platforms. Tech giants selling advertising directly on their platforms—which has benefitted for years from hosting news stories, headlines, and synopses—has been one of the primary drivers in the collapse of revenue for newsrooms. Why buy ads in a newspaper, when you can go where all the headlines are being posted, and buy ads on Facebook or Google? Yet those companies needed those headlines on the platform to give them value, and they paid nothing for them, while, again, usurping the advertising the news relied on. Meanwhile, both of those platforms have effectively become monopolies. Google, officially so. So digital media publishers are entirely at their whims if they want their stories to be accessible online. There is no real competition among search engines, vital to news and information discovery, and little on social media, either—the bulk of the traffic comes from Facebook.

CJPA was an effort to claw back some of what had been lost, to empower newsrooms, and buffer them just a little against the monopoly power of the tech giants—and to make those tech giants pay their fair share for using the work of journalists to help add value to their platforms. It was a complex and admittedly imperfect piece of legislation—show me one that isn’t—based on similar laws that have been enacted in Australia and Canada. And naturally, Google hated it.

Google went all-out to stop the bill’s passage. It turned off News for some Californians in protest. It ran an expensive ad campaign during the Olympics. And it rustled up an array of astroturf groups to express their discontent with the bill. But it might not have even needed to do any of that, as a call to the governor’s office seems to have done the trick.

A week or two ago, I started hearing ominous, secondhand rumblings that California’s governor, Gavin Newsom, wasn’t going to back the bill—and that he’d even threatened a veto if it passed in its current form. That was the word on the street. Now, I’ve never been involved in the organizing around getting this bill written or passed directly. I was a member of the NewsGuild when we discussed whether or not to back it, and voted, along with the rest of the membership, to support it. I wrote a column in the Times urging lawmakers to call Google’s bluff, as Australia and Canada had, and not to give up in the face of tech giant opposition. I did try to place a column urging support again late last week, but was too late—it all fell apart so fast.

Newsom, everyone knows, has national political ambitions. He is also friendly to big tech; he also vetoed supermajority-passed legislation that would have required a human driver to be present in autonomous trucks, just two weeks before a driverless car dragged a pedestrian across the streets of San Francisco. This is almost assuredly pure political calculation; he just doesn’t want to piss off Google.

So, Google’s total opposition and Newsom’s veto threat meant the bill had nowhere to go. But that’s when things got really strange. Without telling the NewsGuild, the union of news media workers that includes LA Times journalists, and was key to marshaling support for the measure from working journalists across the state, the bill’s sponsor, Buffy Wicks, cut the backroom deal. Word leaked the night before, but when her office made the announcement the next day, it was official: Not only was the bill gutted, with Google ponying up just a fraction of what it would have been made to under the law, but it included funding for an “AI accelerator” project that was never in the original bill. No one knows where it came from, or why it’s there. And it truly was a backroom deal; there’s just a press release announcing the agreement, little in writing, and a bunch of laudatory quotes from Google, Newsom, Wicks, and, again, for some reason, an OpenAI executive.

Journalists, especially those involved in helping Wicks build up statewide support for the bill, were livid.

The Media Guild of the West, the parent org of NewsGuild, released a statement headlined “California's journalists do not consent to this shakedown.” Matt Pearce, the president of the Media Guild, and a friend and former Times colleague of mine, was a signatory. No one worked hard to try to ensure this bill would actually benefit journalists—rather than publishers and executives—and now, he says, he’s despondent.

“No one quoted on that press release fought harder for her legislation than the journalists did,” he says. Journalists, of course, were left entirely off said statement, because the deal was cut behind their backs, with the foreknowledge that they wouldn’t approve. “They didn’t even send me a copy of the press release,” Pearce says.

Again, these are the very journalists the bill was supposed to support! To bail out after years of predatory encroachment from a monopolist tech company! The alleged beneficiaries were not invited into the room when it mattered. And while the bill’s failure to pass wasn’t ultimately Wick’s fault—that blame falls on Newsom—it’s an ignominious end to a once promising effort. Or as Pearce calls it, “a very epic and very public betrayal of the journalists who ran through walls for her bill the last two years.”

Pearce points to Canada, where Prime Minister Justin Trudeau refused to be cowed by the tech companies—he campaigned to support the bill, and publicly went to bat for it. The result? It passed, and now delivers $74 million a year to Canadian journalists. Meanwhile, Newsom not only kept silent, but, whether directly or indirectly, made it known he’d veto; handing all the leverage to Google. And news publishers, eager for any scraps thrown their way—better indeed than nothing, they figured—opted for the cut on offer, AI initiatives and all. (I can’t help but laugh at the AI component—the framework boasts of millions in contributions to fund a nebulously defined “AI accelerator.” We can all sleep easy now, knowing that Google has finally committed some money to developing AI.)

The deal amount, on paper, may look impressive: $250 million in funding! But wait, Google is only ponying up about half of that, over 5 years, or $30 million a year. (The state is on the hook for the rest, to be budgeted from some as-of-yet-undisclosed funding source.) And wait again: Google is only actually putting $15 million a year into the new journalism fund; $5 million a year is going to the AI thing, which, again, has not been explained by anyone. And it’s counting the $10 million Google was already investing in various Google News initiatives. So Google is only on the hook for $75 million, spread out over 5 years. That’s like a rounding error on a single quarter of its profits—and it looks like the expenditure may even be tax deductible! For frame of reference, Google paid Apple $20 billion in 2022 to ensure it was the default search engine on Apple devices.

To those who might look at this and agree with the publishers, that well, a few million is better than nothing—look, I’m sympathetic. There’s been a ‘we gotta take what we can get in this dying industry’ mentality for almost as long as I have been a part of it. But that mentality is also partly why we’ve let big tech crush journalism so thoroughly—journalists and publishers have been reluctant to push back on its overreach or its many vampiric tendencies, even when it means a shot at saving our industry itself. (In a bid to demonstrate opposition to the bill from within the journalism industry, the California Foundation for Commerce and Education, the Chamber of Commerce’s “think tank for the California business community,” hired the journalism professor and longtime tech advocate Jeff Jarvis to write a report about the CJPA; surprise, his report concluded it was bad. When I asked him on how much he was paid by the Chamber of Commerce, he did not respond.)

Now, there are three major reasons this legislation is a disaster for journalism: First, it leaves Google and big tech entirely unreformed. There is no serious check on monopoly power, no meaningful restitution for profiting off journalists’ work while decimating the industry, for over a decade. Nothing has structurally changed, and the trajectory of journalistic decline in California will continue. Second, it saps the political will to attempt something like this again, for real. Legislators will conclude they already tried, and well, we got what we got. Finally, and perhaps worst of all, after two very promising examples of how we might meaningfully find ways to stop tech platforms from cannibalizing the news industry in Australia and Canada, Silicon Valley now has a model for skirting responsibility should other states or countries try to make noise about the issue again. Throw a tiny tax write off at the problem, promise some funding for AI to prepare publishers for the future, rinse and repeat.

Those are just the disasters we know, by the way. The AI language is so poorly explained that we don’t know whether it will entail pushing money into some nonprofit that shovels AI tools out to media orgs, or what the stipulations will be. Here’s a likely one: If a newsroom wants to be part of the AI project, then it has to sign a licensing deal first. (Or what if they had to agree to license their corpuses just to get the Google money at all?) Total speculation, but given the degree of capitulation to big tech we’ve already seen, and the involvement of OpenAI, I’d say something like that is certainly plausible. I guess we’ll see!

All told, the last week has been a dizzying 180 for California journalists. From the prospect of real, lasting reform that might usher in a revitalization of the local journalism industry starved by Google and Meta, to a deal that may in fact benefit Google more than journalists. A $15 million tax write off, an escape valve from future attempts at legislation, strengthened ties with publishers and media executives—cutting out the journalists—and even, potentially, fresh arenas for AI training data and products. AI products that are already being used by unscrupulous content creators to generate work that competes with real news—Google News already has been shown to boost AI-generated articles in its rankings, after all—and further starves the wounded industry. No wonder the actual working journalists who once supported CJPA are devastated. It’s some serious whiplash.

Finally, I’ll just note that none of this is possible without Google’s monopoly. That monopoly created the conditions for the journalism crisis in the first place. Then, armed with the wealth and influence accrued as a result, Google could sway the governor of the United States’ biggest economy to abandon an effort at regulation that might revitalize its news industry. There are no competitors that journalists might work with to more equitably deliver access to their work; it’s Google’s way or nothing.

Journalists need to accept the dire state of play. Unless we mobilize, unless big tech’s stranglehold is released, Google is broken up, or the public suddenly gets keen on subsidizing journalism, our industry’s death spiral only stands to accelerate. Ad revenue and subscription rates will continue to decline, and automated AI content farms will proliferate.

Hopefully, this is just round one. It was always going to be an uphill battle, but this one wasn’t even close. As Matt Pearce put it, bluntly: “Google won.”