Axios Sells the Other Thing

Robert Sanchez is forty-nine and has worked in local news since before he finished high school. This year he took a job writing Axios newsletters for Arapahoe and Douglas counties, south of Denver. When he filed a public-records request, he used ChatGPT to draft it; when the documents came back, he used it again to check whether the agency had sent everything. It had not, and he got the rest.

His salary is paid, in effect, by OpenAI. Under a three-year agreement, the company covers the startup costs of thirteen Axios Local newsletters, staff and technology included, and gives Axios employees free credits on its enterprise tools. In exchange, OpenAI trains its models on Axios’s free, published coverage.

Issie Lapowsky laid the arrangement out in Columbia Journalism Review on August 13. Neither company will say what it is worth.

How the deal grew

The first version was announced in January 2025: four cities, Pittsburgh, Kansas City, Boulder, and Huntsville, with OpenAI paying to launch them. Nine more markets were added this year. Axios expects to be in forty-three cities by the end of 2026, and Jim VandeHei, its co-founder and chief executive, has said he wants a thousand.

Axios Local has passed two million subscribers and is not profitable, which the company says was expected. VandeHei would count the expansion a success if each market turned a profit within five years. Reporting jobs posted in early August offered between $65,000 and $125,000.

VandeHei’s argument

VandeHei does not apologize for the deal and does not pretend it is charity. “Could we use AI to basically automate everything you need in a local market other than the journalist and the journalism itself?” he asked Lapowsky. On the training rights: “If someone’s going to pay you for content, you say: Well, how much are you going to pay me? If that payment feels like it’s a fair transaction price, you say yes.”

He calls himself an “AI lab rat,” a willing test subject, and Lapowsky’s feature lets that logic run to its conclusion. He has little patience for the objection that his company is being used. “I just don’t have a whole lot of time for people who are AI deniers,” he said. “Like, good luck.”

The argument has force. Thirteen newsletters that would not otherwise exist are staffed by working reporters, and OpenAI would very likely have trained on Axios’s free content regardless. A company that turns a scraper into a funder has, on one reading, won.

If you strike a direct partnership with an AI company, that benefits you but no one else. There’s a systemic problem, and you’re not really doing anything to address the systemic problem. If anything, you’re kind of benefiting from it. — Matt Pearce, director of policy, Rebuild Local News

What the smaller publisher would be signing

Pearce’s objection is structural rather than moral. He is director of policy for Rebuild Local News, a coalition of more than fifty-five organizations representing over three thousand newsrooms, and CJR frames his point as a collective-action problem: it is often more advantageous for a newsroom to strike a deal than to sue. A company valued in the hundreds of billions is now choosing which local markets get a newsroom. Most of the initial Axios markets are not news deserts.

The unanswered questions are the ones that matter for everyone else. Both companies declined to say what OpenAI paid. Both declined to say whether the agreement limits Axios’s ability to sue OpenAI later. OpenAI’s spokesperson called the terms confidential, and Axios does not generally disclose the partnership in its local job listings.

Axios negotiated with a brand, a legal department, and a majority owner in Cox Enterprises. A weekly with six employees will be offered a version of this deal, and it will have none of those. The archive is priced at whatever the buyer offers when the seller has no alternative. VandeHei’s “fair transaction price” is a phrase that assumes leverage.

This post accompanies the August edition of Neal Notes, whose theme is what local news is being asked to sell. Read it against the companion post on USA Today Co. and Palantir: one chain was criticized for selling what readers left behind, and the other was praised for selling what its reporters made.

Sources

Columbia Journalism Review (Issie Lapowsky), August 13; Axios, January 15, 2025 (“OpenAI to fund four new Axios Local newsrooms”); pickups in The Next Web, MediaPost, Futurism, citybiz, mediacopilot.