Reddit Files for IPO, Strikes AI Training Deal with Google

Reddit's Big Moves: IPO Filing and Strategic AI Training Partnership with Google

Reddit, the popular social media platform, has reportedly entered into a significant agreement with Google, allowing the tech giant to utilize Reddit's content for training its artificial intelligence (AI) models. The deal said to be valued at approximately US$60 million annually, highlights Reddit's efforts to generate additional revenue as it prepares for a highly anticipated stock market debut. This move comes amidst intense competition for advertising revenue from platforms like TikTok and Meta Platform's Facebook.

The sources disclosing this information requested anonymity as they were not authorized to speak to the media. Both Reddit and Google declined to comment on the matter. Reddit agreement with Google represents Reddit's first known deal with a major AI company, indicating a strategic shift towards monetizing its content beyond traditional advertising.

Last year, Reddit announced its intention to charge companies for access to its application programming interface (API), which is used to distribute its content. This deal with Google signifies a significant step in this direction.

Based in San Francisco, Reddit has been contemplating going public for over three years and is reportedly gearing up to file its initial public offering (IPO) this week. This filing would provide potential IPO investors with detailed insights into Reddit's financials for the first time. The business, which was valued at roughly US$10 billion in a 2021 fundraising round, is planning to issue approximately 10% of its shares in the IPO, according to recent Reuters reporting.

Reddit's IPO would mark the first public offering of a major social media company since Pinterest went public in 2019, signifying a significant event in the tech industry.

The use of Reddit's content by Google for AI training aligns with a broader trend of AI model developers seeking diverse training data beyond web scraping. This trend aims to avoid potential copyright issues, as many content creators have raised concerns about unauthorized use of their content.

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit is renowned for its diverse range of niche discussion groups, some of which boast millions of members.

Overall, Reddit's deal with Google underscores its efforts to diversify revenue streams and capitalize on its vast user-generated content. As Reddit moves towards its IPO, the company is positioning itself as a valuable resource for AI development, potentially opening up new avenues for growth in the rapidly evolving tech landscape.