California lawmakers had a chance to pass first-in-the-nation legislation that would have forced Google, Meta, and other tech firms to pay ongoing fees for earning billions from using news outlets’ content while journalism operations have struggled and closed.

But amid the tech industry’s strong-arm tactics, millions of dollars spent lobbying, and allegations of currying favors from power brokers ranging from the California governor to the CEO of a nonprofit news organization, Big Tech scored a backroom deal last month that killed the journalism bills.

Instead of forcing Google, Meta, and other tech companies to cough up potentially billions of dollars in ad revenue, California is moving forward with a smaller, limited-time program whose costs will be split between taxpayers and tech companies — and some of the funding will go toward the development of artificial intelligence tools, a technology that some observers say is an existential threat to the news industry.