on friday, bloomberg Reddit reported that it has signed a deal allowing an unnamed AI company to train models on the site’s content, according to people familiar with the matter. The move comes as the social media platform moves closer to introducing an initial public offering (IPO), which could happen as early as next month.
Reddit initially revealed the deal, said to be worth $60 million a year in early 2024, to potential investors in the expected IPO, according to Bloomberg. Bloomberg sources speculate that this deal could serve as a model for future deals with other AI companies.
After a time when AI companies used AI training data without explicitly seeking permission from rights holders, some tech companies have recently started using AI similar to GPT-4 (which runs a paid version of ChatGPT). Some of the content used to train models is beginning to have applicable contracts. license. For example, in December, OpenAI signed the agreement German publisher Axel Springer (publisher of Politico and Business Insider) provided access to the article. OpenAI previously had contracts with other organizations, including: Associated Press. According to reports, OpenAI is also in licensing negotiations with CNN, Fox, Time, and others.
Steve Huffman, Founder and CEO of Reddit, April 2023 told the New York Times The company plans to charge AI companies for access to about 20 years of human-generated content.
If the reported $60 million a year deal goes through, anyone who has posted on Reddit will know that some of that material will be used to train the next generation of AI models that create text, still images, and video. There is a good chance it will be used. Even without consensus, experts have found in the past that Reddit is an important source of training data for large-scale language models and AI image generators.
It’s not known if OpenAI is the company that signed the deal with Reddit, but Bloomberg reports that Reddit’s ability to capitalize on the AI hype and generate additional revenue could boost the value of its IPO, taking it to $5 billion. I suspect that it will. Despite the drama last year, Bloomberg says Reddit generated more than $800 million in revenue in 2023, an increase of about 20 percent compared to 2022 numbers.
Advance Publications, which owns Ars Technica’s parent company Condé Nast, is Reddit’s largest shareholder.