Posted on by Vishnu Devarajan
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Reddit has a new AI training deal to sell user content
20 Feb
Reddit will let “an unnamed large AI company” have access to its user-generated content platform in a new licensing deal, according to Bloomberg yesterday. The deal, “worth about $60 million on an annualized basis,” the outlet writes, could still change as the company’s plans to go public are still in the works.
Until recently, most AI companies trained their data on the open web without seeking permission. But that’s proven to be legally questionable, leading companies to try to get data on firmer footing. It’s not known what company Reddit made the deal with, but it’s quite a bit more than the $5 million annual deal OpenAI has reportedly been offering news publishers for their data.
The news also follows an October story that Reddit had threatened to cut off Google and Bing’s search crawlers if it couldn’t make a training data deal with AI companies. The rumor’s source told The Washington Post then that the company “can survive without search.”
Whether or not that’s true — after all, one of the best ways to get around SEO spam in search results is to add the word “Reddit” to your search query — Reddit has shown that it’s willing to play hardball before. Last year, it successfully stonewalled its way out of the biggest protest in its history after changes to its third-party API access pricing caused developers of the most popular Reddit apps to shut down.
As Bloomberg writes, Reddit’s year-over-year revenue was up by 20 percent by the end of 2023, but it was still $200 million shy of a $1 billion target it had set two years prior. The company was reportedly advised to seek a $5 billion valuation when it opens up for public investment, which is expected to happen in March. That’s half the $10–$15 billion it might have achieved the last time it filed to go public in 2021, before a market downturn held it back.
