According to three sources, Reddit, a social media platform, has entered into an agreement with Google (GOOGL.O) to provide its content for training the search engine giant’s artificial intelligence models. This collaboration signifies a significant step in leveraging social media data for advancing artificial intelligence capabilities.
One source states that Alphabet, the owner of Google, holds a contract worth approximately $60 million per year.
As Reddit gears up for a high-profile stock market debut, the deal illustrates its strategy to generate fresh revenue amidst intense competition for advertising dollars from TikTok and Meta Platform (META.O), Facebook. In this competitive landscape, Reddit is strategically positioning itself to maximize revenue opportunities.
The sources, unwilling to be identified, declined authorization to speak with the media.
Reddit and Google declined to comment.
Bloomberg previously reported on Reddit’s content deal without identifying the buyer.
Last year, Reddit announced that it would charge companies for access to its application programming interface (API), which is how it distributes content. The agreement with Google marks the company’s first reported partnership with a major AI company.
After contemplating a stock float for over three years, San Francisco-based Reddit is now preparing to file for an initial public offering this week. In a significant move, the company unveils its financials for the first time, marking a crucial step that offers valuable insights for potential IPO investors. This disclosure provides a pivotal opportunity for stakeholders to assess the company’s financial health and make informed investment decisions.
Two sources suggest that the filing could be available as early as Thursday.
As reported by Reuters, the company, valued at $10 billion in a funding round in 2021, intends to sell approximately 10% of its shares in the upcoming offering. This move signals the company’s strategic approach to capitalizing on market opportunities and expanding its financial footprint.
Since Pinterest floated its shares in 2019, no major social media company has conducted an IPO until Reddit considers its own.
In recent months, AI model developers have actively signed agreements with content owners, aiming to diversify their training data beyond large scrapes of the internet. This reflects a growing recognition of the importance of varied and high-quality data sources in enhancing artificial intelligence models. That practice is fraught with potential copyright issues, as many content creators have claimed that their work was used without permission.
Reddit was founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian. It is known for its numerous niche discussion groups, some of which have tens of millions of members.
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