Social news platform Reddit disclosed on Thursday (2/22) that it has filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission (SEC), aiming to trade under the ticker symbol RDDT on the New York Stock Exchange (NYSE). On the same day, Reddit also announced an expanded partnership with Google. According to Reuters, this collaboration will enable Google to use Reddit’s content for training AI models, with an annual value of $60 million.
Founded in 2005, Reddit allows registered members to upload various content, including articles, links, photos, and videos. Other members then vote in favor or against this content, determining its visibility. Currently hosting over 100,000 communities, Reddit attracts 73 million daily and a staggering 2.67 billion weekly non-unique visits, accumulating over 10 billion posts.
Ranked as the ninth-largest website in the U.S. and the seventeenth-largest globally, Reddit primarily generates revenue from advertising, including sponsored posts or promotional content. The company, in its Form S-1 filing for the IPO, revealed annual revenues of $666 million in 2022 and $804 million in 2023, with respective losses of $158 million and $90 million.
Form S-1 also details major shareholders holding over 5% of Reddit’s shares, including Tencent and OpenAI co-founder Sam Altman, listed as joint names due to their association with related enterprises.
Simultaneously, Reddit announced an expanded collaboration with Google, although both parties’ press releases seem to downplay the specifics. According to Google, the partnership involves Reddit using Vertex AI to enhance the platform’s search and other capabilities, with Reddit’s content gaining increased visibility across various Google products.
In the future, Google will have access to Reddit’s Data API, allowing more efficient and structured access to updated information. This will enable Google to better understand Reddit’s content and display it in the most accurate and relevant manner or use it for training models.
Earlier, Bloomberg reported that Reddit would license platform content to an AI company for model training, estimating the deal’s value at $60 million annually.
Over the past year, AI companies have aggressively utilized online content to train their models, leading to pushback from content providers, including Reddit. In April of last year, Reddit updated its terms of service, introducing a paid version of the Reddit Data API, requiring developers in need of additional features, higher usage, or greater permissions to pay for access. However, the policy, originally aimed at restricting AI companies, resulted in several prominent apps shutting down. Developers initiated a joint protest action, causing disruptions on the Reddit platform.