2/22/2024

Reddit makes deal with Google

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Key points:

  • Reddit has entered into an agreement with Google for $60 million per year.
  • Google will use Reddit content to train its AI models.
  • The deal aims to protect copyrights on Reddit using artificial intelligence.

Social media platform Reddit has entered into a partnership with Google, allowing the search giant to utilize Reddit’s content for training its artificial intelligence models. The primary objective of this collaboration is to implement AI-driven copyright protection measures within the Reddit platform.

The contractual agreement with Google is anticipated to be valued at approximately $60 million per year. This strategic move by Reddit, as it prepares for a high-profile stock market debut, reflects its efforts to diversify revenue streams amid stiff competition for advertising investments from platforms like TikTok and Meta Platform.

In a notable shift, Reddit announced last year its decision to charge companies for accessing its application programming interface (API), which serves as the conduit for content distribution. The collaboration with Google represents Reddit’s first significant deal with a major artificial intelligence company.

Reddit is preparing for an IPO

The rationale behind this decision by the discussion platform can be attributed to Reddit’s imminent filing of an initial public offering (IPO) this week. The IPO will serve as a disclosure of Reddit’s financial details for the first time, presenting crucial information to potential investors.

Valued at approximately $10 billion in a 2021 funding round, Reddit aims to sell around 10% of its shares through the offering. This event marks the first IPO by a major social media company since Pinterest’s public debut in 2019.

In recent months, makers of artificial intelligence models have actively pursued agreements with content owners. This trend is driven by the desire to broaden their training data sources beyond the vast volumes available on the internet. However, this practice raises copyright concerns, with numerous content creators alleging the unauthorized use of their content.

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