Reddit, which bills itself as the “front page of the Internet,” reportedly sells access to user-generated content to an anonymous AI company for $60 million a year, leaving the social media platform with a potential $5 billion. Ethical concerns are rising as companies prepare for a major IPO.
ars technica report According to a recent report, Reddit has signed a major deal that allows an anonymous artificial intelligence company to access and utilize user-generated content from its platform for AI training purposes. The development comes as Reddit prepares for an initial public offering (IPO) expected to take place as early as next month.
The deal is said to be worth $60 million annually. Although the AI company was not named, the agreement could set a precedent for similar deals between Reddit and major AI players like OpenAI, the Microsoft-backed creator of ChatGPT. .
If the deal goes through as reported, Reddit user content could be used to train next-generation AI models that can generate text, images, and video.
Last year, Reddit leadership revealed plans to charge AI companies for using decades of user contributions available on the platform. Selling access to user data is consistent with a trend for technology companies to license content, rather than scraping data without permission.
While the ethics may be debatable, Reddit stands to benefit financially from this AI deal. The deal could increase the valuation of Reddit’s upcoming IPO, which could reportedly be worth up to $5 billion.
Despite recent controversies, Reddit generated more than $800 million in revenue in 2023. The AI deal and impending IPO could significantly increase the company’s valuation and revenue. The site faced a user revolt in 2023 over site policies such as API access, and has faced a long-running controversy over censorship and far-left rules and guidelines.
It remains to be seen how Reddit users will react to their content being sold for AI development without direct consent or compensation. But for now, Reddit appears to be capitalizing on the AI hype in preparation for an initial public offering.
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Lucas Nolan is a reporter for Breitbart News, covering free speech and online censorship issues.
