ALBAWABA – The social media giant, Reddit, has reportedly signed a $60 million deal with an unnamed Artificial Intelligence company that allows it to access more than 10 years of user-generated data to train its AI models, according to a Bloomberg article, with details on the anticipated Initial Public Offering of Reddit, worth 10 percent of the company’s assets.
Reddit has posted its year-on-year revenue, which soar 20 percent, reaching $800 million by the end of 2023 financial year, however failing with $200 million to reach its $1 billion goal, as Bloomberg notes.
Executives from Reddit emphasize the company's dedication to ethically using AI, as according to PC Tablet, one top executive said, "We want to improve the Reddit experience by making it more engaging and personalized while respecting our users' privacy and autonomy," with tech analysts highlighting the potential for cutting-edge AI-powered services and apps, speculating that Reddit may establish new benchmarks for AI's incorporation into social media.
I mentioned yesterday that Google’s best strategy for maintaining AI dominance will be using its deep pockets to lock down sources of training data.
We’ve now learned Reddit has signed a $60M/year deal to provide its data to an unnamed AI company. Key question is if exclusive? pic.twitter.com/U3wGynmXnS— Dare Obasanjo🐀 (@Carnage4Life) February 17, 2024
The deal is formed on annual basis, as Reddit told investors it has signed the $60 million deal earlier this year, with Bloomberg’s sources adding that it might serve as a template for future contracts between the companies.
Earlier in January, Reuters reported that Reddit is planning to launch an IPO this March, making it the first major social media IPO since Pinterest’s debut in 2019, considered as a test for the platform users on whether they would support the stock.
In 2021, Reddit was valued at $10 billion, and filed to publicly sell 10 percent of its shares, however, according to Bloomberg’s report, the platform has been advised to consider a lower $5 billion IPO valuation due to market situation, which also notes that details of the deals are still progressing and might change as we approach the potential March launch date.
