OpenAI, Microsoft fund $10M Lenfest Institute AI local news project

• "The scale, we think, is significant," he added.

Zoom in: The deal will fund an AI collaborative and fellowship program for five U.S. metro news organizations to start, including Chicago Public Media, The Minnesota Star Tribune, Long Island Newsday, The Philadelphia Inquirer and The Seattle Times.

• The new program is being driven in partnership with The Lenfest Institute's Local Independent News Coalition (LINC), a group of eight of the largest independently owned metropolitan news organizations.

By the numbers: OpenAI and Microsoft will equally contribute $5 million in grant funding to power the project and $5 million in enterprise credits for selected newsrooms to experiment with generative AI projects that can bolster local news.

• Each outlet will receive $500,000 in grant money to cover the cost of hiring a two-year AI fellow to work on projects that focus on driving sustainable businesses for local news. (Three more newsrooms will be awarded fellows in a second round of grants in the coming months.)
• The outlets can use OpenAI and Microsoft Azure credits they receive as part of the project to experiment and develop tools for local newsrooms.

Between the lines: The deal only includes funding of the collaborative and AI fellows. It does not include any sort of licensing terms or real-time data exchanges to train and serve large language models at OpenAI and Microsoft.

• This fellowship was originally incubated between Lenfest Institute and OpenAI, and Microsoft joined later to double the project's impact.

How it works: Each local outlet will use the funds and credits to explore different ways AI can be used to bolster local news editorially and commercially.

• For example, The Philadelphia Inquirer is using AI to build a conversational search interface for its archives, while The Seattle Times will use AI to help with advertising analytics and sales support.
• Chicago Public Media, home to The Chicago Sun-Times and parent company of radio station WBEZ, will focus on leveraging AI for transcriptions, summaries and translations.
• The Minnesota Star Tribune will experiment with AI summarization, analysis and content discovery. Newsday will build AI public data summarization and aggregation tools for its newsroom, readers and marketing partners.

The big picture: Local news has been devastated by the news industry's business crisis, putting the pressure mostly on philanthropic groups to fund innovation efforts.

• The hope with this deal is that the grantee organizations will work collaboratively to share their learnings with other news outlets, driving faster innovation for local news.

• "The Collective puts the notion of a live lab on steroids, funding embedded engineers, enterprise software, and product development across multiple organizations at scale for open sharing and replication across the news industry," Friedlich said.

Zoom out: Most of the major AI partnerships brokered by OpenAI so far have been with national news outlets, but it has supported local news as well through its $5 million-plus deal with the American Journalism Project and more recently through its deal with Hearst, which includes 40 local newspapers.

• Tom Rubin, chief of intellectual property and content at OpenAI said the entity is "deeply invested in supporting smaller, independent publishers" and "ensuring they have access to the same cutting-edge tools and opportunities as larger organizations."

What to watch: OpenAI has taken the lead amongst the major AI companies in striking licensing deals with news outlets, but Microsoft recently said it would pay news outlets for content surfaced by its AI Copilot assistant.

• Microsoft is funding the project through its Democracy Forward initiative, with engineering resources and software support coming from the office of its CTO.
• Friedlich said there's "a sincere and genuine desire" at both companies to help advance the business sustainability of local news.
• "We need local journalism to inform and educate citizens, expose wrongdoing, and encourage civic engagement," said Teresa Hutson, corporate vice president, technology for fundamental rights at Microsoft.