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Tuesday, Apr 23, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

AI and Autonomy

Reddit inks major AI training deal with Google, files for public listing in New York

Google will use Reddit’s posts to help train its AI models; the social media platform aims to to be publicly listed next month

Reddit obtains US$60M deal with Google for AI training, files for public listing
The entrance to Reddit's Los Angeles headquarters. Photo credit: Reddit

In what is being considered the most significant initial public offering of a social media company since Pinterest Inc (NYSE: PINS) in 2019, Reddit has filed for listing on the New York Stock Exchange under the ticker RDDT.

The company also announced this week that it has secured a deal with Alphabet Inc Class A (Google) (NASDAQ: GOOGL) enabling the tech giant to train its AI models using Reddit’s content. Sources told Reuters that the contract is valued at about US$60 million per year.

“We’re ushering in new ways for Reddit content to be displayed across Google products by providing programmatic access to new, constantly evolving and dynamic public posts, comments, etc.,” Reddit said in a news release. The average investor will be able to get a piece of the pie by the end of March.

Reddit was founded in 2005 and is currently valued at about US$10 billion. The company primarily generates revenue through online advertising sales from its website and mobile app. In 2023, Reddit’s sales rose by 20 per cent from the previous year to US$804 million.

“Google will now have efficient and structured access to fresher information, as well as enhanced signals that will help us better understand Reddit content and display, train on and otherwise use it in the most accurate and relevant ways,” Google said on Thursday. The technology company unveiled its most advanced AI model to date in December: Gemini.

Read more: Apple engineer sentenced for stealing self-driving car tech

Read more: George Carlin’s family sues Dudesy podcasters over ‘ghoulish’ AI impression of late comedian

Reddit: one of the most viewed websites in the U.S.

The forum-style social network pulls more traffic than the vast majority of American websites, the search engine marketing platform Semrush (NYSE: SEMR) says. About 73 million people use it every day.

In its news release, Google praised the company, stating that it had a “large platform with an incredible breadth of authentic, human conversations and experiences.”

“The conversation ranges from the sublime to the ridiculous, the trivial to the existential, the comic to the serious,” Reddit Co-Founder and CEO Steve Huffman said.

OpenAI’s chief executive Sam Altman will invest a minimum of US$60 million in Reddit once its shares are listed. He will hold 9.2 per cent of the company’s voting power after the IPO. The AI platform’s CEO invested an equivalent sum of money into Reddit in 2021, which he saw a 45 per cent return on.

Altman previously led a US$50 million Series B funding round for Reddit in 2014. He had used the social media platform every day for nine years at that point in time.

Reddit disclosed that it had invested excess cash reserves into bitcoin and ether cryptocurrencies in its IPO filing with the American Securities and Exchange Commission.

 

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