• The deal, “worth about $60 million on an annualized basis,” could still change, Bloomberg wrote.
  • Reddit’s revenue grew 20% year-over-year by the end of 2023, but it’s still $200 million short of the $1 billion target it set two years ago.

According to Bloomberg, in a new licensing agreement, Reddit will allow “an unnamed large artificial intelligence company” access to its user-generated content platform. The deal, which is “worth about $60 million on an annual basis,” could still change, the outlet wrote, as the company’s IPO plans are still in the works.

This is a trend

Until recently, most AI companies trained their data on open networks without asking permission.But this has proven to be legally problematic, leading companies to try to get data on firmer ground. It’s not clear which company struck the deal with Reddit, but the deal far exceeds the $5 million a year that OpenAl reportedly provides to news publishers for its data. Apple is also seeking multiyear deals with big news companies worth “at least $50 million,” according to The New York Times.

Also read: Reddit to discontinue blockchain-based community points reward program

In October, Reddit threatened to cut off Google and Bing’s search crawlers if it couldn’t reach a training data deal with AI companies.The source of the rumor told The Post at the time that the company “can survive without search.”
Whether that’s true or not – after all, one of the best ways to avoid SEO spam in search results is to add the word “Reddit” to your search query. Last year, it managed to fend off the biggest outcry in its history after a change in pricing for third-party API access caused the developers of the most popular Reddit app to shut down.

Future development

As Bloomberg writes, Reddit’s revenue grew 20% year-over-year by the end of 2023, but it’s still $200 million short of the $1 billion target it set two years ago.The company was reportedly advised to seek a $5 billion valuation when it opens to the public for investment in March. That’s half the $10 billion to $15 billion the company could have achieved when it last filed to go public in 2021, when a market downturn hampered its growth.