An unnamed company, which until two days ago was revealed to be tech giant Google, is now set to leverage the extensive array of user-generated content on Reddit for training of artificial intelligence (AI) models.
According to Reuters, in a landmark deal valued at $60 million annually, Reddit has granted Google access to its vast content repository. This agreement serves dual purposes: it provides Google with a rich dataset for AI training, and it opens a new revenue stream for Reddit as it faces stiff competition from social media giants like TikTok and Meta’s Facebook.
Following the news going live, people globally rushed to their social media accounts to express their opinions and insights on the agreement.
Much of Reddit’s content, aside from niche interests, tends toward astroturfing, creative writing, or engagement bait. Expecting quality training material for AI from such a mix suggests a questionable motive.
— Christian Mangelsdorf (@ch_mangelsdorf) February 22, 2024
The deal has been publicized as Reddit prepares for a highly anticipated Initial Public Offering (IPO), marking a significant milestone in the company’s journey toward becoming a publicly traded entity.
Reddit, valued at around $10 billion in 2021, is expected to file for its IPO this week, aiming to sell approximately 10% of its stocks in the offering. This strategic partnership is set to leverage Reddit’s diverse content, which spans numerous niche discussion groups with millions of members, to enrich Google’s AI models.
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This collaboration comes at a time when there is a growing demand among AI developers for diverse and comprehensive training data free from potential copyright issues. By tapping into Reddit’s rich content pool, Google aims to refine its AI algorithms and models, enhancing its understanding and interaction capabilities.
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For Reddit, this deal not only bolsters its financial standing ahead of its IPO but also solidifies its position as a vital data source for AI research and development.
The agreement marks the first of its kind since Reddit announced last year its plans to monetize access to its application programming interface (API), which facilitates the distribution of its content.
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The deal is a strategic move for Reddit, providing it with a significant revenue boost and supporting its growth and expansion plans, especially as it eyes a $5 billion valuation at its IPO—a figure nearly half of what it could have achieved had it gone public in 2021, a delay caused by market downturns.
As Reddit gears up for its IPO, the partnership with Google is proof of the value of Reddit’s user-generated content in training sophisticated AI models.
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