It has been recently revealed that Reddit has signed an annual $60 million contract with an undisclosed AI company. The purpose of the contract is to allow the AI company to use Reddit’s vast content for training their AI models. This move is in preparation for Reddit’s upcoming initial public offering (IPO) which may take place next month. By securing the rights to Reddit’s content for AI training, this agreement demonstrates a trend in the tech industry of formalizing the use of online content for AI data training.
In recent moves, OpenAI has secured agreements with Axel Springer and the Associated Press and is reportedly also in licensing talks with CNN, Fox, and Time, among others. Reddit’s CEO, Steve Huffman, announced plans to monetize access to its extensive archives for AI development. This strategy not only opens a new revenue stream but could also enhance Reddit’s valuation ahead of its anticipated $5 billion IPO. The platform, despite facing challenges, reported a 20% revenue growth in 2023, reaching over $800 million. This deal underscores the growing importance of user-generated content in AI development and the evolving landscape of digital rights and licensing.
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