OpenAI is financing 13 local newsletters from Axios in a three-year agreement.

      OpenAI is covering the initial expenses for 13 new Axios Local newsletters, which includes funding for both personnel and technology. Additionally, Axios employees receive free credits for OpenAI’s enterprise solutions. In exchange, Axios allows OpenAI to train its models using its publicly available news content. This agreement is set to last for three years.

      Issie Lapowsky detailed this arrangement in the Columbia Journalism Review last week, providing the most comprehensive description of the partnership to date, which serves as the basis for much of what follows.

      Axios aims to determine if a local newsroom can thrive with all aspects other than journalism and the journalist being automated. Jim VandeHei, the company’s CEO, framed it as a question to Lapowsky: “Could we use AI to basically automate everything you need in a local market other than the journalist and the journalism itself?”

      Three years, six weeks

      On August 9, VandeHei wrote a column discussing what he refers to as post-processable velocity, indicating that change is happening faster than any individual, organization, market, or government can manage. While preparing for an Axios board meeting, he remarked that discussions with six-month timelines seemed unrealistic. He noted a significant insight: “For the first time ever, my confident line of sight is six weeks tops.”

      He advised readers to reduce their reliance on long-term plans that depend on forecasts of future events. The Axios OpenAI local news initiative spans three years, supports 13 newsrooms, and encourages reporters to develop careers within them.

      What remains unsaid

      Allison Murphy, Axios’s COO, informed CJR that OpenAI has invested sufficiently to launch the new markets. However, neither company has revealed the specific amount involved. Furthermore, they have not clarified whether this agreement prohibits Axios from pursuing legal action against OpenAI. An OpenAI representative mentioned that the terms of the deal are confidential.

      This second silence is particularly significant. Local newspapers are currently litigating against OpenAI for utilizing their work in training models. Whether Axios has forfeited the right to take similar action is not merely a standard business detail but a crucial distinction between a licensing agreement and the resolution of an unfiled lawsuit.

      Axios does not include this partnership in its local job postings, nor does it feature prominently in its OpenAI reporting, except in articles focused on media agreements. An Axios employee anonymously expressed to CJR that this lack of transparency has led to discomfort among journalists.

      Funding did not target news deserts

      OpenAI initially financed four cities: Pittsburgh, Kansas City, Boulder, and Huntsville—each chosen by Axios. Notably, Huntsville lacks a daily newspaper, but the other three do not typically fall into the category of news deserts as defined by researchers.

      VandeHei commented to CJR that covering entirely unserved communities would represent “the Holy Grail.” However, he emphasized that Axios needs to demonstrate the financial viability first. Currently, Axios Local boasts over two million subscribers but is not yet profitable, which Axios has indicated was anticipated. VandeHei stated that achieving profitability in each city within five years would be viewed as a major accomplishment.

      Structural issues highlighted

      Matt Pearce, policy director at Rebuild Local News, a coalition of over 3,000 newsrooms, pointed out the inherent problem with one-off arrangements. “If you create a direct partnership with an AI company, it benefits you alone and not anyone else. There’s a broader systemic issue at play, and this doesn’t address it,” Pearce stated to CJR.

      Lack of union representation creates limitations

      Prior to the OpenAI agreement, Axios reduced its workforce by 10% and cut an additional 11 positions this year. The organization is not unionized. In contrast, the union at Politico successfully enforced an arbitration ruling that halted two AI tools at the outlet co-founded by VandeHei.

      During an OpenAI panel discussion in March, VandeHei spoke about how Axios dealt with internal opposition. “We were upfront with our employees that if they were apprehensive or disapproved, we were not concerned,” VandeHei remarked, insisting that staff needed to accept the changes.

      Holly Moore, the executive editor of Axios Local, conveyed to CJR that staff concerns diminished once it became evident that nobody was required to utilize AI for reporting. On the same panel, Shira Center from the Boston Globe differentiated her employer’s stance, stating that the Globe does not intend to replace reporters with automated tools.

      Arguments for the arrangement

      The most compelling case for the partnership is illustrated by working journalist Robert Sanchez, who writes two Axios newsletters covering Douglas and Arapahoe counties in Colorado, an expanse larger than Rhode Island. He is the sole byline for local stories, whereas competitors deploy multiple reporters in the same regions.

      When covering AI in policing, Sanchez utilized ChatGPT to draft a public records request in accordance with Colorado law, including identifying the appropriate recipient. He processed the request through a filter developed by Axios to minimize the