Google has reached a deal with California to contribute to a $250 million fund supporting California journalism over five years in exchange for legislators abandoning a bill requiring the tech giant to pay to use news content in Google Search. The proposed compromise, which has already generated controversy, allocates roughly $70 million from the state budget with the rest primarily from Google. In addition to financially supporting newsrooms, the fund will create a National AI Innovation Accelerator to provide access to new tools. Both initiatives are expected to go live in 2025, pending legislative approval.

In a press release, State Assemblymember Buffy Wicks, who authored the potentially averted AB 886, called the program “a first-in-the-nation partnership with the State, news publishers, major tech companies and philanthropy.”

The majority of funding will go to newsrooms, with $100 million earmarked to kickstart efforts in year one, say lawmakers noting that the total investment could increase if additional funding becomes available.

According to California Governor Gavin Newsom, the agreement “represents a major breakthrough in ensuring the survival of newsrooms and bolstering local journalism” without imposing new taxes, “reinforcing the vital role of journalism in our democracy.”

The UC Berkeley Graduate School of Journalism will administer the News Transformation Fund, with allocations based on how many full-time journalists California newsrooms employ.

The Los Angeles Times reports “the agreement marks the culmination of a two-year battle between the news industry and the tech sector over how to resuscitate local journalism amid massive upheavals in how people consume news and how advertisers reach consumers.”

The agreement has the support of the California News Publishers Association and the Local Independent Online News Publishers group. It has a critic in the labor guild that supported Wicks’ bill but opposes the compromise.

“The union had lobbied for the deal to include a provision requiring media companies that receive the funds to have a non-expired collective bargaining agreement, and for Google to contribute more than the $74 million it pays annually to newsrooms in Canada,” neither of which was achieved, explains LA Times.

The New York Times writes that “the president pro tempore of the State Senate, Mike McGuire, questioned legislative support for the state’s share of the deal, which would require approval as part of the annual budget process.”