SAN FRANCISCO (Reuters) — Social media platform Reddit has entered into a deal with Google to provide its content for training the search engine giant’s artificial intelligence models, as reported by three sources familiar with the matter.
The agreement with Alphabet-owned Google is reportedly valued at around $60 million per year, according to one of the insiders.
This deal emphasizes Reddit’s effort to generate additional revenue as it prepares for a high-profile stock market launch amid stiff competition for advertising dollars from platforms such as TikTok and Meta Platform’s Facebook.
The sources, who opted not to be identified, were not authorized to speak to the media. Both Reddit and Google declined to provide comments. Bloomberg had previously reported Reddit’s content deal without disclosing the buyer.
Reddit announced last year 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 known agreement with a major AI company.
Based in San Francisco, Reddit, which has been considering a stock float for over three years, is getting ready to file for its initial public offering this week, which would disclose its financials for the first time to potential IPO investors.
The filing could be available as early as Thursday, according to two of the sources.
The company, which was valued at roughly $10 billion in a funding round in 2021, is planning to sell about 10% of its shares in the offering, as previously reported by Reuters.
Reddit’s stock market launch would mark the first IPO of a major social media company since Pinterest went public in 2019.
Makers of AI models have been actively securing deals with content owners in recent months to diversify their training data beyond large-scale internet scrapes. This practice is fraught with potential copyright issues, as many content creators have alleged that their content was used without permission.
Established in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit is known for its numerous niche discussion groups, some of which have tens of millions of members.
(Reporting by Anna Tong in San Francisco, Echo Wang in New York and Martin Coulter in London; Additional reporting by Jeffrey Dastin; Editing by Anirban Sen, Krystal Hu and Edwina Gibbs)
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