Bloomberg cites insiders revealing that popular forum Reddit is selling usage rights for its platform content to an AI company for model training.
In a bid to showcase profitability to investors, Reddit disclosed at the beginning of the year that it is selling content licensing for $60 million annually to an undisclosed AI firm for model training, boosting company revenue. Reddit’s estimated revenue for this year is currently $800 million.
As the largest online forum, Reddit’s content has become a crucial dataset for AI companies in recent years, although the company is reluctant to allow free usage of its content. In April last year, Reddit modified its terms of service, and CEO Steve Huffman stated plans to charge companies training AI models with its content. There were reports last year of Reddit planning to block Google searches, aiming to make AI companies pay for using content on the platform.
In contrast, companies like OpenAI and Google, after facing resistance from media and online content platforms for early free content use, have shifted to collaborative paid channels to access content rights. Reports indicate that OpenAI has already signed licensing agreements with news content publishers such as Axel Springer (parent company of Business Insider), The Associated Press, CNN, Fox News, and Time Magazine, allowing them access to news content on their platform.
The buyer of Reddit’s content licensing in this transaction remains unknown. However, Bloomberg’s analysis suggests that Reddit’s move to sell platform content licensing demonstrates its profitability and could contribute to boosting its IPO valuation, currently estimated at $5 billion.