Reddit Signs AI Content Licensing Deal With Google; Said to Be Worth $60 Million a Year

Feb23,2024



Social media platform Reddit has struck a deal with Google to make its content available for training the search engine giant's artificial intelligence models, three people familiar with the matter said.

According to a source, the contract with Alphabet-owned Google is worth about $60 million (about Rs 497 crore) per year.

The deal underscores how Reddit, which is preparing for a high-profile stock market launch, is trying to generate new revenue amid fierce competition for advertising dollars from TikTok and meta platforms like Facebook.

The source was not authorized to speak to the media and declined to be identified.

Reddit and Google declined to comment.

Bloomberg previously reported the Reddit content deal without naming the buyer.

Last year, Reddit said it would charge companies for access to its application programming interface (API) – the medium through which it distributes its content. The deal with Google is its first reported deal with a major AI company.

San Francisco-based Reddit, which has been considering a stock float for more than three years, is preparing to file its initial public offering this week, which will give potential IPO investors details of its financial position for the first time.

Two sources said the filing could be available as soon as Thursday.

The company, which was valued at about $10 billion (roughly Rs. 82,897 crores) in a funding round in 2021, is seeking to sell about 10 percent of its shares in the offering, Reuters reported earlier.

Reddit's stock market launch would be the first IPO of a major social media company since Pinterest floated its shares in 2019.

Creators of AI models have been busy striking deals with content owners in recent months, aiming to diversify their training data beyond large scraps of the internet. This practice is fraught with potential copyright issues as many content creators have alleged that their content was used without permission.

Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit is known for its many niche discussion groups, some of which have millions of members.

© Thomson Reuters 2024


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