Social media platform Reddit has reportedly entered into a deal with Google, valued at around $60 million per year, to make its content available for training the search engine giant’s artificial intelligence models.
The move comes as Reddit prepares for its highly anticipated stock market launch, seeking to diversify its revenue streams amid fierce competition for advertising dollars.
The agreement highlights Reddit’s strategic approach to monetizing its platform, especially as it faces competition from platforms like TikTok and Meta’s Facebook. Reddit’s decision to charge companies for access to its application programming interface (API) was announced last year, and this deal with Google marks its first reported collaboration with a major AI company.
The contract signifies a shift in the landscape of AI model training, with content providers striking deals to diversify training data sources beyond large-scale web scraping. While potential copyright concerns loom over such agreements, Reddit’s move underscores the platform’s efforts to leverage its extensive and diverse user-generated content.
As Reddit prepares for its initial public offering (IPO), expected to be filed this week, the deal with Google adds a layer of financial depth to its portfolio. The IPO filing, set to reveal the company’s financials for the first time, is anticipated to be available as early as Thursday.
With a valuation of about $10 billion in a 2021 funding round, Reddit aims to sell approximately 10% of its shares in the offering, marking a significant moment in the social media landscape as the first major IPO since Pinterest in 2019.
