Reddit has just sealed a $60 million yearly deal with a mysterious AI giant, granting access to its user-generated content. This move, part of Reddit’s prep for going public, is a step away from the traditional AI approach of scraping the open web without permission.
While the AI collaborator remains unnamed, it’s a hefty deal compared to OpenAI’s $5 million offer to news publishers. Apple is also rumored to be pursuing multi-year agreements with news companies, possibly worth a minimum of $50 million.
In October, Reddit reportedly threatened to block Google and Bing’s search crawlers if no training data deal with AI companies was struck. The company’s bold stance aligns with its history, successfully navigating a major protest last year following API pricing changes.
Despite a 20% YoY revenue increase in 2023, Reddit fell $200 million short of its $1 billion target. Advised to target a $5 billion valuation for its upcoming public investment in March, Reddit aims to rebound from its 2021 IPO attempt, hampered by market conditions.
READ: Reddit’s Workforce Restructuring: 5% Workforce Set to Face Layoffs
As Reddit gears up for public investment, one wonders if these strategic moves will catapult it to new heights. Can Reddit’s daring maneuvers secure its place in the competitive landscape?