Reddit has signed a contract that provides for the possibility of using content posted on this social media platform to train artificial intelligence models.

The media published the relevant information with reference to insiders aware of the mentioned contract. Special attention should be paid to the fact that Reddit has decided to use the content posted on its digital platform on the eve of its initial public offering, which is something like a long-awaited event.

Representatives of the company, whose head office is located in San Francisco, informed potential investors that a deal worth about $60 million was signed in early 2024. The media published the relevant information with reference to an insider, who also clarified that the specified business agreement was concluded with a certain large company operating in the artificial intelligence industry. So far, there is no data on which AI brand the social network platform signed the deal with. Separately, the insider noted that the concluded business agreement could become a kind of model for the subsequent establishment of partnerships between Reddit and other companies specializing in artificial intelligence.

Media outlets, citing insiders, report that last year the revenue of the social media platform exceeded the $800 million mark. This figure is about 20% higher than the result recorded in 2022.

From the point of view of Reddit’s commercial interests and in the context of forming a kind of base for positive business prospects in the future, an agreement on cooperation with a company from the artificial intelligence industry is the right move. In this case, the social media platform to a certain extent becomes part of a large-scale AI development process, which automatically increases its competitiveness in terms of gaining investor attention. This is a very important advantage ahead of the IPO. The fact of interaction with the AI industry can speed up the listing.

Also, a partnership with a company specializing in the development of artificial intelligence will allow Reddit to become a beneficiary of the so-called boom of this advanced technology. It should be clarified that the social media platform is highly likely to face a limited effect from the involvement of the sphere of AI. This forecast is explained by the fact that Reddit is not a technology company in the standard sense of the corresponding definition and interacts with the artificial intelligence industry in the format of oblique engagement, which envisages assistance for AI developers but does not reckon for directly participating in the development of digital thinking systems.

Media reports that Reddit has been advised to consider an IPO worth at least $5 billion. According to preliminary information, the relevant process may begin as early as March.

Insiders also reported that the IPO details are currently being discussed and have not yet been finalized. Moreover, according to them, the details of the social media platform’s deal with a company from the artificial intelligence industry may change in the foreseeable future.

Insiders used the right of anonymity, noting that the issues of IPO and cooperation with the AI brand are currently being discussed in the so-called backstage format and are not information related to the public category. Representatives of Reddit did not provide any comment after a media request on the listing and the deal with an unnamed firm.

It is worth noting that currently, the cooperation of companies specializing in the development of artificial intelligence with content providers is to some extent standard practice. AI brands need data to train their digital thinking systems. For example, in December, OpenAI signed a contract with the German media giant Axel Springer SE. The cost of this deal amounted to several tens of millions of dollars.

OpenAI is also in talks to cooperate with CNN, Fox, and Time. In this case, the company strives to use the mentioned media’s information materials for the subsequent transmission of relevant data arrays to its chatbot to make the answers to users’ questions more relevant, accurate, and up-to-date.

As we have reported earlier, Reddit Launches Rewards Program for Moderators.