Reddit has struck a deal with Google, $GOOGL, to make its content available for training the search engine giant's artificial intelligence models
Reddit has struck a deal with Google, $GOOGL, to make its content available for training the search engine giant's artificial intelligence models, per Reuters.
One of the sources indicated that the contract with Alphabet-owned Google is valued at approximately $60 million per year. This agreement highlights Reddit's efforts to generate new revenue as it prepares for a high-profile stock market launch, amid intense competition for advertising dollars from platforms like TikTok and Meta Platform's Facebook.
The sources, who requested anonymity as they were not authorized to speak to the media, declined to be identified. Both Reddit and Google declined to comment on the matter. Bloomberg had previously reported on Reddit's content deal without disclosing the buyer.
Last year, Reddit announced that it would charge companies for access to its application programming interface (API), which is how it distributes its content. The deal with Google marks its first reported agreement with a major AI company.
Based in San Francisco, Reddit has been considering a stock float for over three years and is now preparing to file its initial public offering (IPO) this week, revealing its financials to potential IPO investors for the first time. The filing could be available as early as Thursday, according to two of the sources.
In a funding round in 2021, the company was valued at approximately $10 billion. It is looking to sell about 10% of its shares in the offering, Reuters previously reported.
If Reddit goes public, it will be the first major social media company to do so since Pinterest's IPO in 2019. AI model developers have been actively securing deals with content owners in recent months to diversify their training data, aiming to move beyond large internet scrapes. However, this practice has raised copyright concerns, as many content creators have claimed their content was used without permission.
Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit is renowned for its diverse niche discussion groups, some of which have millions of members.