Updated February 22nd, 2024 at 19:08 IST

Reddit strikes $60 million deal with Google to train AI model on platform’s data

Amidst stiff competition for advertising revenue from platforms like TikTok and Meta Platform's Facebook, Reddit is exploring new avenues for monetisation.

Reported by: Business Desk
Reddit | Image:Unsplash
Advertisement

Reddit’s data to train Google AI: Social media platform Reddit has reportedly struck a lucrative deal with Google to provide its content for training the tech giant's artificial intelligence models, according to three sources familiar with the matter. The contract, valued at approximately $60 million annually is seen as an attempt to diversify Reddit’s revenue streams ahead of its anticipated stock market debut.

Amidst stiff competition for advertising revenue from platforms like TikTok and Meta Platform's Facebook, Reddit is exploring new avenues for monetisation. While neither Reddit nor Google has officially commented on the deal, Bloomberg previously reported on Reddit's content agreement without disclosing the buyer.

Advertisement

This partnership marks Reddit's first reported deal with a major AI company, signalling its shift towards generating revenue through data partnerships. Last year, Reddit announced plans to monetise its application programming interface (API), which facilitates content distribution. With the Google deal, Reddit aims to leverage its vast repository of user-generated content to enhance Google's AI capabilities.

Headquartered in San Francisco, Reddit has been contemplating an IPO for over three years and is reportedly preparing to file its initial public offering this week. The IPO filing, expected as early as Thursday, will provide potential investors with insights into Reddit's financial performance and growth trajectory.

Advertisement

Valued at approximately $10 billion in a 2021 funding round, Reddit plans to offer around 10 per cent of its shares in the IPO, making it the first major social media company to go public since Pinterest in 2019.  

As AI model developers seek to enrich their training data, partnerships with content providers have become increasingly common. However, such collaborations raise copyright concerns, as content creators often claim their work is used without permission.

Advertisement

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit has become synonymous with online communities, fostering discussions on a wide range of topics. With the impending IPO and strategic partnerships like the one with Google, Reddit aims to capitalise on its extensive user base and unique content ecosystem for sustained growth in the competitive digital market.

(With Reuters inputs)

Advertisement

Published February 22nd, 2024 at 10:08 IST