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Reddit Shares Surge as AI-Powered Advertising Drives Revenue Momentum

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Reddit shares rallied sharply after the company issued a stronger-than-expected revenue outlook, signaling that its AI-driven advertising strategy is rapidly strengthening its position in the digital ad market and helping it compete more directly with larger platforms like Meta.

The company reported impressive first-quarter performance, including 69% year-over-year revenue growth, rising daily active users, and substantial gains in average revenue per user. Investor enthusiasm centered on Reddit’s expanding AI-optimize

d advertising platform, which allows brands to place highly targeted promotions within relevant subreddit discussions, creating contextual ad opportunities that differ from traditional social feed advertising.

Reddit’s AI tools are also improving campaign execution through features such as automated ad copy generation and creative optimization, making the platform more attractive to advertisers seeking efficient, community-focused engagement. This performance suggests Reddit is successfully transforming its unique discussion-based ecosystem into a scalable ad business.

Beyond advertising, Reddit’s vast archive of human-generated conversations is increasingly valuable in the broader AI economy. As artificial intelligence companies continue searching for large-scale training datasets, Reddit’s content ecosystem may serve as both a strategic monetization asset and competitive differentiator.

The results are particularly notable given broader social media industry pressures, where competitors such as Snap and Pinterest have faced slower growth and workforce reductions. Reddit, by contrast, is expanding hiring and investing in platform development, indicating confidence in its business trajectory.

While Reddit’s valuation remains relatively high compared with some peers, the market appears increasingly willing to reward its dual role as both an advertising platform and an AI-era data asset. The company’s long-term success will likely depend on maintaining user engagement while scaling monetization without undermining community trust.

Reddit Sues Perplexity for Allegedly Scraping Data to Train AI Search Engine

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Reddit has filed a lawsuit in a New York federal court against artificial intelligence startup Perplexity, accusing it of unlawfully scraping Reddit data to train its AI-based “answer engine.” The complaint also names three other companies — Lithuania-based Oxylabs, Russia-based AWMProxy, and Texas-based SerpApi — alleging that they bypassed Reddit’s data protection systems to extract massive amounts of content.

According to Reddit, Perplexity “desperately needs” the stolen data to strengthen its search capabilities. The platform, home to thousands of user-driven “subreddit” communities, said its content is one of the most frequently cited sources for AI-generated responses. Reddit has legally licensed its data to OpenAI, Google, and other companies, but claims Perplexity acted without authorization.

The lawsuit follows similar cases across the tech industry involving unauthorized use of copyrighted materials to train AI models. Reddit had previously sued Anthropic in June for similar conduct. Perplexity rejected the accusations, calling its methods “principled and responsible.” Meanwhile, Reddit’s chief legal officer Ben Lee accused AI firms of engaging in “industrial-scale data laundering.”

Reddit is seeking financial damages and a court order preventing Perplexity from continuing to use its content.

Amazon Restores AWS Cloud After Global Outage Disrupts Major Apps and Businesses

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Amazon (AMZN.O) said its AWS cloud services had fully recovered by Monday afternoon following a massive outage that disrupted businesses and websites worldwide, including major platforms such as Snapchat, Reddit, Venmo, and Zoom. While all core systems were back online, Amazon noted that some AWS services still faced a backlog of messages expected to clear within hours.

The outage, which began earlier in the day, briefly knocked thousands of companies offline across Europe, Asia, and the Americas, halting digital payments, travel bookings, and business operations. It was the largest internet disruption since the CrowdStrike crash of 2024, underscoring the fragility of global cloud infrastructure.

According to Amazon, the failure originated in the US-EAST-1 region — AWS’s oldest and largest data center cluster in northern Virginia, which has suffered similar incidents in 2020 and 2021. The root cause was traced to a malfunction in the subsystem monitoring network health for its Elastic Load Balancers, which distribute web traffic across multiple servers.

AWS explained that the issue began within its EC2 internal network, disrupting the Domain Name System (DNS) used to connect services to their databases, including the DynamoDB API, which stores critical user data.

Experts said the incident exposes the world’s dependence on a few dominant cloud providers. “This outage once again highlights the dependency we have on relatively fragile infrastructures,” said Jake Moore, cybersecurity advisor at ESET. Nishanth Sastry, of the University of Surrey, added that the disruption showed “the risk of relying on just one service provider.”

The outage’s ripple effects hit a wide range of sectors. Financial institutions including Lloyds Bank, Bank of Scotland, and HMRC, as well as telecom firms BT and Vodafone, reported temporary downtime in the UK. In the U.S., Coinbase, Robinhood, Perplexity, and Lyft experienced interruptions, while gaming services like Fortnite, Roblox, and Clash Royale also went dark. Even Amazon’s own Prime Video, Alexa, and shopping platform were affected.

Despite the chaos, Wall Street shrugged off the disruption, sending Amazon shares up 1.6% to $216.48 by market close. Experts estimate that hours of cloud downtime can translate into millions of dollars in lost productivity for large companies, a reminder of the growing risks in the digital economy.