Senators warn AI could lead to ‘destruction’ of local news

Happy Thursday! If my phone could survive a fall from my clumsy hands, that would be enough for me. Send news tips to: [email protected].

Below: The crypto industry notched a regulatory win, and a sanctioned oligarch ran pro-Kremlin Facebook ads. First:

Senators warn AI could lead to ‘destruction’ of local news

Lawmakers on Capitol Hill have tried for years to pass legislation to give news outlets more bargaining power against the tech giants, warning that their dominance over digital ads is decimating the industry — most of all, local news.

But at a hearing Wednesday, senators zeroed in on how a new perceived threat could hurt the news industry: the rise of generative artificial intelligence.

Sen. Richard Blumenthal (D-Conn.), whose subcommittee held the session on AI and journalism, said declining news revenue and technological changes are creating a “perfect storm” that is “accelerating and expanding the destruction of local reporting.”

AI could pose a dual threat to outlets, with developers seizing on their work to train AI models “without compensation or credit” while enabling the creation of lightly staffed news sources to compete with them, he warned.

Sen. Amy Klobuchar (D-Minn.), who has proposed legislation to let news organizations band together during negotiations with the tech giants, said she was “very concerned” that the decline of local news would “only worsen with the rise of generative AI.”

The session took place during a critical time in the debate.

The New York Times last month sued OpenAI and Microsoft over their alleged use of its copyright articles to train their AI systems. It marked the latest in lawsuits accusing tech companies of violating content creators’ intellectual property.

The cases, as my colleagues Will Oremus and Elahe Izadi wrote last week, “have the potential to rattle the foundations of the booming generative AI industry.”

OpenAI fired back in a blog post Monday, calling the Times lawsuit “without merit” and arguing that its use of “publicly available internet materials” to train its products was protected under a legal principle known as “fair use.”

The ChatGPT maker also accused the Times of “not telling the full story,” saying the two companies had been engaged in “negotiations focused on a high-value partnership” as recently as December to display and attribute the publication in OpenAI’s products.

While the courts consider those legal challenges, some news outlets are moving ahead and partnering with AI developers, including local news organizations.

Politico parent company Axel Springer in December announced a deal for OpenAI to display “summaries of selected global news content” from the outlet in ChatGPT. Financial terms were not disclosed, but the Times reported that the deal netted the German media giant more than $10 million. (Disclosure: I previously worked for Politico.) The Associated Press unveiled a similar news-sharing deal back in July.

OpenAI last year also struck a $5 million deal with the American Journalism Project to support efforts by local publications to experiment with AI tools.

Some news organizations, meanwhile, are leaning on the tools in an attempt to fill gaps in their local coverage. News Corp., parent company of the Wall Street Journal and Fox News, has said it is producing thousands of weekly local news stories in Australia using generative AI. Small outlets that rely heavily on generative AI to produce content have popped up in recent months, including around Boston.

Blumenthal argued that while there’s major potential in using AI to augment journalism, it should not “replace” members of the press, especially locally.

“It’s never a substitute for local reporters in local newsrooms, broadcasters, journalists who reflect their community and talk to their neighbors,” Blumenthal said.

Our top tabs

Regulators approve new bitcoin fund in win for crypto industry

The move by the Securities and Exchange Commission is a victory for the reeling crypto industry. (Andrew Kelly/Reuters)

Federal regulators on Wednesday greenlit a new tool that tracks the price of bitcoin, “a major decision that could lead to the cryptocurrency becoming more mainstream just over a year after the crypto markets crashed,” our colleague Gerrit de Vynck writes.

The Securities and Exchange Commission authorization means that “banks and investment firms will now be able to sell exchange traded funds, or ETFs, that own bitcoin to regular consumers,” rather than going through crypto trading firms like Coinbase, Gerrit reports. “Now, retail investors will be able to buy the bitcoin ETFs in the same way they might buy a public company’s stock or a mutual fund.”

Hailed by the crypto industry as a major win, the decision could lift “some of the stigma that has clung to bitcoin for years, especially after high-profile cryptocurrency scams and business failures,” he adds.

The announcement came a day after hackers seized the agency’s X account to claim that the funds had already been approved, as my colleague Joseph Menn reported.

U.S.-sanctioned oligarch repeatedly ran pro-Kremlin ads on Facebook

Meta CEO Mark Zuckerberg leaves an AI forum on Capitol Hill in September. (Jabin Botsford/The Washington Post)

A Moldovan oligarch with ties to the Kremlin ran hundreds of Facebook ads just months after the company said it would block them, Wired’s David Gilbert reports.

“Last February, when researchers at London-based nonprofit Reset found that Meta was allowing Ilan Shor, a Moldovan oligarch with links to the Kremlin, to run an ad campaign on Facebook, the company promised to stop him,” according to the report. “But Shor, whom the United States sanctioned for illegally financing political parties in Moldova and pushing Russian disinformation, wasn’t finished.”

New research by the nonprofit uncovered that over six months, Shor and his groups ran “more than 100 fake Facebook pages to run hundreds of ads that amassed 155 million impressions and earned Meta at least $200,000 in revenue.”

“Malicious actors like this are persistent, and as we’ve said before, we’ve previously detected efforts to use other Pages and accounts in an attempt to amplify content related to him,” said Ben Walters, a Meta spokesperson. “We have and will continue to take action when we find inauthentic behavior, or content, or ads that violate our policies.”

Amazon declines to offer E.U. concessions in iRobot case

The Amazon logo appears on a screen panel at Amazon’s HQ2 in Crystal City, Virginia on September 20, 2023. (Eric Lee for the Washington Post)

Tech giant Amazon is declining to offer concessions to the European Union as it looks to lock down approval for its proposed $1.4 billion takeover of digital vacuuming company iRobot, Politico Europe’s Josh Sisco and Aoife White report.

“The companies have until the end of the day on Wednesday to make an offer to tackle European Union objections that Amazon could hamper rival vacuum cleaners’ sales on Amazon’s online marketplace, which regulators said is a particularly important sales channel for the product,” according to the report. The final deadline for the E.U. to clear or veto the deal is Feb. 14.

Amazon declined to comment, and the commission’s press office didn’t respond to a request for comment, the report said.

Hill happenings

U.S. lawmakers seek to regulate AI vendors to the government (Reuters)

Inside the industry

Huawei Ends US Lobbying Operations After Years of Fighting Ban (Bloomberg)

Microsoft debates what to do with AI lab in China (New York Times)

OpenAI’s new app store could turn ChatGPT into an everything app (Wired)

X slashed 30 percent of trust and safety staff, an Australian online safety watchdog says (Associated Press)

Substack wanted to be neutral. Its tolerance of Nazis proved divisive. (By Will Oremus and Taylor Lorenz)

Workforce report

Duolingo cuts workers as it relies more on AI (Gerrit De Vynck)

Before you log off

That’s all for today — thank you so much for joining us! Make sure to tell others to subscribe to The Technology 202 here. Get in touch with tips, feedback or greetings on X or email.

Senators warn AI could lead to ‘destruction’ of local news