Social media platform, Reddit has entered agreement with Google, an Alphabet-owned company, to provide its content for the training of the search engine giant’s artificial intelligence models.
Valued at approximately $60 million per year, the contract highlights Reddit’s strategic move to generate additional revenue, especially as it gears up for a high-profile stock market debut.
This initiative comes amid intense competition for advertising dollars from platforms like TikTok and Meta’s Facebook.
As part of its revenue diversification strategy, Reddit had previously announced plans to charge companies for access to its application programming interface, the tool through which it disseminates content.
The collaboration with Google represents Reddit’s first reported deal with a major AI company, emphasizing the platform’s commitment to exploring innovative partnerships.
Based in San Francisco, Reddit has been contemplating a stock market debut for over three years and is poised to file its initial public offering this week. This filing will provide potential IPO investors with the first glimpse into Reddit’s financials.
In an effort to raise capital, the company, valued at approximately $10 billion in a 2021 funding round, aims to sell around 10% of its shares during the IPO.
This move towards an IPO by Reddit is particularly noteworthy as it would mark the first initial public offering of a major social media company since Pinterest went public in 2019. The $60 million annual deal with Google underscores Reddit’s determination to strategically position itself in the evolving landscape of online platforms.
In recent months, developers of AI models have actively sought partnerships with content owners, aiming to broaden their training data beyond extensive internet scrapes. However, this practice raises concerns about potential copyright issues, as content creators have frequently alleged unauthorized use of their content.
Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit has become renowned for its diverse array of niche discussion groups, some boasting memberships in the tens of millions.
As Reddit prepares for its market debut, the collaboration with Google signifies a pivotal step in leveraging its rich content for advancements in artificial intelligence.
