Reddit, the popular social media platform, is making significant strides towards its anticipated stock market debut. Recent reports reveal that Reddit has struck a notable agreement with Google, aimed at providing its content to train the artificial intelligence models of the tech giant.
According to sources familiar with the matter, the contract with Google, an Alphabet-owned company, is valued at a substantial $60 million (approximately Rs. 497 crore) per year. This strategic move by Reddit comes as it prepares for its upcoming stock market launch, amidst a competitive landscape where platforms like TikTok and Meta Platform’s Facebook vie for advertising revenue.
The individuals disclosing this information preferred to remain anonymous, as they were not authorized to speak to the media. Both Reddit and Google have opted not to comment on the specifics of the deal.
This collaboration with Google is particularly noteworthy as it signifies Reddit’s efforts to diversify its revenue streams. Last year, Reddit announced plans to charge companies for access to its application programming interface (API), the mechanism through which it distributes its content. The agreement with Google marks Reddit’s first reported deal with a major AI company, indicating a strategic shift in its business model.
Based in San Francisco, Reddit has been contemplating a stock float for over three years. The platform is now gearing up to file its initial public offering (IPO) this week, providing potential investors with its financial details for the first time.
Sources suggest that the filing could be made available as soon as Thursday. Reddit, valued at approximately $10 billion (around Rs. 82,897 crore) in a funding round last year, intends to offer roughly 10 percent of its shares in the IPO, as previously reported by Reuters.
If Reddit’s IPO proceeds as planned, it would mark the first major social media company to go public since Pinterest’s IPO in 2019.
In recent months, there has been a trend among creators of AI models to secure deals with content owners, aiming to diversify their training data beyond standard internet scrapes. However, this practice has raised concerns regarding potential copyright issues, as content creators often claim their work was used without permission.
Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit has gained prominence for its diverse array of niche discussion groups, some boasting memberships in the tens of millions. As Reddit prepares for its market debut, the agreement with Google underscores its strategic efforts to navigate the evolving digital landscape and solidify its position in the industry.
