Reddit emerged as one of the first text-based social media channels where people could converse and express diverse opinions on happenings across the globe. Initially positioned as a news aggregator site, the platform soon grew to encompass a wider spectrum. Now, Reddit is known to be an open and welcoming space where people post questions, theories, and thoughts that other users can interact with. The quirky platform is not everyone’s cup of tea, but the users who do browse Reddit, enjoy its interface and contribute regularly.

Reddit Signs Deal With AI Company


An anonymous AI company has reportedly reached a licensing agreement with Reddit to use its user-generated content for its training model. Bloomberg noted that the deal is reportedly worth $60 million on an annualized basis. This news comes at a time when the platform is gearing up to go public. The current model by which AI companies gather and learn data has come into question since it is said to be illegal.

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The companies are using data from the web without any permission. So, to mitigate any future liability, a few AI companies are working on deals with platforms that will let them use their data. OpenAI was also trying to crack a deal with news publishers in the past, but nothing panned out. Towards the end of last year, Reddit’s year-over-year revenue increased by 20%. While the social media platform is used and popularized by users, what will the platform do if the angry users leave Reddit altogether?

The deal has sparked outrage among the users on Reddit as well as other social media sites. People are genuinely concerned about their data being shared and the endless spread of AI in every sphere of life. The posts on X ranged from fear of social media sites in the future to the lack of regulation that will someday see the unencumbered rise of AI. Users are questioning the contents of the deal and want to know what will be shared. No official spokesperson from the company’s management has commented on the same yet.

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Will Reddit Go Public?

Steve Huffman, CEO, Reddit
Steve Huffman, CEO, Reddit

The San Francisco-based company is planning to open for public investments through an IPO in March, thus making us wonder if this deal is a bad idea. Given the power of users to exit the platform and its subsequent impact on Reddit, the company is underestimating the power of users in making or breaking a platform that especially relies on user content.

The company planned on going public in 2021 but the plan fell through because of the market situation. Back then, it was valued at somewhere between $10-15 billion as compared to its $5 billion valuation currently. Nonetheless, Reddit seems fully confident in its ability to retain users and keep its position since it has mitigated various protests in the past. However, the company needs to realize the growing distrust towards AI and this situation might put the platform in a pickle it cannot get out of.

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