Axios Bets That AI Can Make Local News Pay, One Market at a Time

In the spring of 2023, Axios Local hit the brakes. 

The network of local newsletters had spread to 30 markets in under three years, but it had missed its revenue goal, was unprofitable, and decided to stop expanding until it could prove the markets it already entered could make money.

Three years later, expansion has resumed. The program is now on track to be in 43 markets by the end of the year, nearly halfway to its eventual goal of 100 metro areas. The Local business is generating “tens of millions” in revenue with multiple profitable markets, and last week it quietly hit its first-half revenue goal, according to chief operating officer Allison Murphy. 

Overall, Axios beat its first-half revenue target earlier this month, capping a fourth straight year of double-digit growth, although it declined to share further financial specifics. As a whole, the company is profitable.

The company, which launched in 2017 and was acquired by Cox Enterprises in August 2022 for $525 million, has reached these milestones by being an early adopter of a strategy that has since come to be widely emulated. 

By targeting niche, professional audiences without adopting a widespread paywall, the publisher has been able to sell advertisers on a compelling blend of scale and influence, according to chief revenue officer Jacquelyn Cameron. Its embrace of newsletters, from which it has since expanded, also insulated the news brand from the traffic declines now upending publishers whose businesses were built on the open web. 

“We have proven that there is more power and opportunity in 535 than 535,000,” Cameron said, referencing the number of members of Congress. “Premium or die.”

That philosophy is visible across the national business. Advertising still accounts for the vast majority of revenue, the bulk of which is sold directly to clients and increasingly anchored in thought leadership aimed at five distinct audience profiles. In May, CEO and founder Jim VandeHei launched an application-only newsletter for C-suite executives that has already grown past 4,000 readers and will exit beta in June with an underwriter attached.

The events business, Axios Live, is growing more than 30% year over year and now generates tens of millions of dollars, according to Cameron. Its sizable presence at Cannes Lions in June will generate 50% more revenue than 2025 and be profitable for a second consecutive year. 

None of that, on its own, distinguishes Axios from the rest of the premium cohort. News outlets ranging from Semafor to The Wall Street Journal have introduced exclusive newsletters, and business-facing events have proliferated thanks to their value as physical touchpoints for enterprise marketing. 

The harder, more distinctive bet is on addressing the local news crisis, an economic challenge that few news brands have sought to solve, let alone even attempt. 

Now, the company is betting that artificial intelligence will change that calculus, and the centerpiece of the gamble is an expanded partnership with OpenAI. 

The original deal, struck in January 2025, provided cash that enabled Axios to hire reporters and absorb the startup costs of new markets, along with providing the publisher enterprise access and a large allotment of usage tokens, according to Murphy. 

In exchange, OpenAI gets permission to use Axios content for training and access to its feed for retrieval. The first phase funded four cities. The second round, announced this January, will support an additional seven to nine, according to Murphy.

Crucially, the new markets look different from the old ones. Where Axios once entered the largest metro areas with two or three reporters apiece, it is now expanding into smaller, one-reporter geographies—places like Boulder and Colorado Springs—and grouping them into regions, or “local supersystems,” to build awareness and reach sustainability faster.

The shared infrastructure makes this phase of expansion more viable, as the technology costs of adding another reporter to a preexisting system are minimal.

In addition to its funding from OpenAI, Axios is also using its technology to build out a fleet of AI-enabled tools.

Similar to a content-management system, this platform gives every reporter a personalized daily feed of their community’s news and a suite of automations, from data visualization to “localizer” technology that adapts a story written for Austin to run in Dallas. The full version of the platform is expected to be operational in September, when the local team holds its annual retreat.

And while other media brands work to coax staff into embracing AI, at Axios the buy-in has been largely enthusiastic. When the outlet sought 15 internal AI champions, Murphy said, 100 employees volunteered. One reporter used Claude Code to generate 43 versions of a single data chart, one for each community. 

“You are either on the bus or you are not at this point,” Murphy said.

Still, Axios is careful to frame Local as an investment business rather than a finished success. 

The national business has been profitable for years; Local has multiple profitable markets and is hitting its margin benchmarks, but the portfolio as a whole is not yet profitable. Subscriptions—roughly 15,000 paying members across Local—will only ever be part of the mix; Murphy estimates they may one day reach 25% to 30% of local revenue.

And even if the unit economics ultimately work, a more fundamental question hangs over the model: whether it actually addresses the local news crisis it positions itself against. 

Chris Krewson, executive director of LION Publishers, a trade association for independent local newsrooms, argues that the Axios Local model depends on the availability of original reporting that it does not itself produce as a standard newsroom would. 

As a result, the company is “additive” only in a narrow commercial sense, in that it captures advertising dollars in markets it previously could not access.

“Axios Local is generally not investing in shoe-leather beat reporting and spade work,” Krewson said, “because it would take too many people, and that’s too expensive.”

Holly Moore, the executive editor of Axios Local, pushed back on that characterization, saying that the majority of content produced in the newsletters is original or sourced from a centralized team that identifies and localizes nationwide trends.

Either way, five years in and the project still remains a gamble. The supersystem may finally make premium local news pencil out. Or it might just reach the same plateau Axios hit before, only this time with better tooling.