Reddit Inks AI Content Licensing Pact With Google, Valued at $60 Million Annually

In a strategic move aimed at leveraging its vast repository of user-generated content, social media behemoth Reddit has reportedly entered into a groundbreaking agreement with tech giant Google. Under the terms of the deal, Reddit will provide access to its content to facilitate the training of Google’s artificial intelligence models, according to sources familiar with the matter. With an estimated value of approximately $60 million (equivalent to roughly Rs. 497 crore) annually, this contract underscores Reddit’s concerted efforts to diversify its revenue streams and capitalize on its extensive content ecosystem.

This lucrative partnership comes at a pivotal moment for Reddit, as the platform gears up for a highly anticipated debut on the stock market. As Reddit charts a course toward a public listing, securing strategic alliances with industry heavyweights like Google becomes paramount in bolstering its financial standing and positioning itself as a formidable player in the digital landscape.

Against the backdrop of intensifying competition for advertising revenues from platforms such as TikTok and Meta Platform’s Facebook, Reddit’s collaboration with Google represents a strategic maneuver to unlock new avenues for revenue generation and cement its relevance in an ever-evolving market environment.

As Reddit continues to navigate the complexities of the digital advertising landscape, the partnership with Google offers a compelling avenue for both platforms to synergize their respective strengths and drive mutual growth. By harnessing Reddit’s vast trove of diverse and dynamic content to fuel Google’s AI initiatives, the collaboration promises to yield significant advancements in machine learning capabilities while simultaneously enhancing user experiences across both platforms. With Reddit’s impending stock market debut on the horizon, this landmark deal with Google sets the stage for a transformative chapter in Reddit’s evolution as a leading player in the global digital ecosystem.

Last year, Reddit said it would charge companies for access to its application programming interface (API) – the means by which it distributes its content. The agreement with Google is its first reported deal with a big AI company.San Francisco-based Reddit, which has been looking at a stock float for more than three years, is preparing to make its initial public offering filing this week, which would detail its financials for the first time to potential IPO investors.

The filing could be available as early as Thursday, two of the sources said.  The company, which was valued at about $10 billion (roughly Rs. 82,897 crore) in a funding round in 2021, is seeking to sell about 10 percent of its shares in the offering, Reuters has previously reported.

Founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit is known for its manifold niche discussion groups, some of which boast tens of millions of members.