This theoretical framework-driven article addresses the challenges faced by local journalism in adapting to technological innovations, particularly in the context of declining traditional funding models and an increasing reliance on digital platforms. As journalism shifts towards automation and data-driven processes, local media organisations’ slow adoption of artificial intelligence (AI) has raised concerns about their sustainability. The study explores how the unique characteristics of local journalism contribute to path dependencies that hinder innovation adoption by drawing on institutional theory. By reviewing policy and funding initiatives, as well as extant literature, the article proposes a model for local journalism’s adoption curve and examines its application in Germany and Norway. The findings highlight the need for long-term incentives and support schemes to address local journalism’s current economic challenges.