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Reddit’s multimillion-dollar AI deal: A new era in content licensing

Reddit's pioneers US$60 million deal with an AI company is reshaping content licensing and AI development ahead of its IPO.

As a Reddit user, your posts and comments might soon be training artificial intelligence (AI) models. Bloomberg reports a significant move by Reddit, engaging in a content licensing deal estimated at around US$60 million annually with a prominent AI company. This development is critical to Reddit's strategy as it prepares for its anticipated initial public offering (IPO).

A groundbreaking partnership

Reddit disclosed this lucrative deal to potential investors earlier this year, a precursor to its expected IPO. The identity of the AI company remains undisclosed, but the agreement is thought to set a precedent for future collaborations. Reddit's user-generated content, accumulating for over 18 years, is a treasure trove for companies developing AI technologies. In April last year, Reddit announced its plan to charge for API access, which is essential for companies to train their chatbots using data from Reddit's diverse posts and comments.

Reddit's community and monetisation

The Reddit community's decision to monetise API access has been met with mixed reception. The tiered pricing model aims to be accessible to smaller clients, but it has sparked protests from numerous Reddit communities, affecting the platform's stability. However, this monetisation strategy could significantly increase Reddit's appeal to investors, especially with its potential $5 billion valuation at the upcoming IPO.

The broader implications for AI and content licensing

This deal is part of a broader AI industry trend where companies actively seek content partnerships to enhance their language models. , for instance, has secured rights to use content from Business Insider and Politico and is discussing partnerships with other publishers, including CNN, Fox Corp, and Time. However, OpenAI faces legal challenges, such as a lawsuit from The New York Times for allegedly using content without proper authorisation. Despite this, OpenAI remains optimistic about its ongoing discussions for potential partnerships.

As Reddit approaches its IPO and the AI industry evolves, the relationship between platforms and AI training becomes increasingly crucial. This deal represents a significant moment in the nexus of social media and AI, setting a standard for future content licensing agreements.

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Gabriela Gavrailova
Gabriela Gavrailova
Gabriela is a freelance news editor at Tech Edition, where she writes about technology and often does listicles and product reviews. Based in Austria, Gabriela is a person with many and diverse hobbies. If you don't find her reading a book at home or baking something, she will probably be out hiking or taking some classes to learn a new skill.

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