This article addresses the challenges facing local newspapers as the digital economy transitions to artificial intelligence (AI). We interview five CEOs of Scandinavian newspaper corporations, representing small, mid-sized, and large newspaper chains. The analysis focuses on three main factors emerging from the interviews – technological transformations, digital advertising markets, and corporate enrolment – and how they relate to business model disruption and the non-substitutability of local news. The analysis is set within the framework of the digital transformation, which, for the purpose of this study, we argue consists of two phases: getting online (until about 2014), and algorithmic adaptation (the introduction of programmatic advertising and audience metrics from about 2014). The analysis concludes that as non-substitutability is lost on the advertising side of the market, this challenges the umbrella model of newspaper publishing.