Credit: DALL-E

It's getting tense out there.

For starters, there's a growing skepticism about the real utility of AI. More headlines are throwing cold water on the idea that AI will "10x your productivity" or whatever, and this seems to be reflected in slowing investment in the industry. All the while, tech companies are still fiercely competing in the race to build the best AI, despite a lack of clarity if the billions they're spending to do so will ever truly pay off.

It's amid this backdrop that there was a notable flare-up in the ongoing cold war between the news industry and Big Tech when Google (GOOGL) announced it was testing a version of its search results in California that didn't include links to news stories.

This was in response to a new law being considered in the state that would effectively put a tax on links to news. For every link to a news story that shows up in search, Google would have to pay a fractional fee, the logic being that the search giant benefits from the existence of that news and has paid nothing to get it. Google, of course, argues that such a fee makes no sense since it's the publisher that benefits from the traffic Google sends to their site.

If it feels like you've seen this movie before, you have: Similar laws have been tried in both Canada and Australia. In both regions, when Meta (META) removed news links from its networks, Facebook, Instagram and WhatsApp, it was devastating to publishers.

To be clear, this isn't the law yet in California, and Google's action was only a test. But it was also a message — the company published a very public blog post about what it was doing, lambasting the proposed law and suggesting that it would benefit media conglomerates and hedge funds instead of small publications.

You can put aside the irony of a $2 trillion-dollar company standing up for the little guy for a minute, because Google clearly did, too: The company said it would be hitting pause on any California-based future investments in the Google News Initiative, which provides smaller newsrooms with money and free access to AI-powered tools for news gathering and production. 

So to discourage legislators from helping save the news industry, Google is squeezing that industry even further.

You really couldn't ask for better evidence of Google's massive conflict of interest when it comes to its involvement in news. A massive concern in the media is generative search — when an AI chatbot just summarizes news for you, the very traffic that Google cites as the benefit of its service will be cut off from news publishers. To what extent we don't know yet, but the day is undoubtedly coming (check the Otherweb story below for an example of how this would work).

So Google is simultaneously managing a program to provide AI-powered tools to publishers while using that same AI technology to decimate the links the news industry relies on with generative search. Certainly, news media needs all the help it can get given the state of the industry, but this development should give any newsroom pause before accepting Google's "help." However good its tools are (and there's definitely reason to be skeptical on that score, too), Google will always put its own priorities first, and right now that means asserting dominance in AI.

On the question of providing search traffic to news — and the lack thereof in generative experiences — this bill won't solve that problem. But it could be part of the way we get to a solution that won't be entirely dedicated by Big Tech.

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