Reddit Prepares for Wall Street, Accompanied by Google

Social media platform Reddit has struck a deal with Google to make its content available for training the search engine giant's AI models, as per Reuter’s sources. 

The contract worth about $60 million per year underlines how Reddit is preparing to become the first high profile company planning to go public in years. Through the deal, Reddit is seeking to generate new revenue amid fierce competition for advertising dollars from the likes of TikTok and Meta Platform's Facebook.

“We expect our data advantage and intellectual property to continue to be a key element in the training of future AI models,” Steve Huffman, Reddit’s chief executive, said in a founder’s letter included in the prospectus. 

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 an AI leader.

Reddit, in its investor statement, acknowledged challenges and risks tied to its public status. The platform highlighted concerns about the rise of large language models and underlying AI systems, capable of generating and synthesizing content, potentially allowing users to access Reddit ad-free. 

Emphasizing reliance on its community for moderation, Reddit expressed that future revolts or departures that could adversely impact the platform. The note highlights the company's awareness of the changing AI landscape and the significance of community dynamics, urging investors to consider these factors in assessing the platform's long-term stability and success.

Interestingly, OpenAI’s chief Sam Altman, is the third largest shareholder in the online discussion website, with an 8.7% stake. The word on the street is that Reddit is the boot camp for training the heavyweights in large language models— OpenAI's GPT-3.5, even the elusive GPT-4, and other popular models. 

Altman has been in the Reddit game for a decade. He even donned the CEO hat for a hot minute back in 2014, stepping in for Yishan Wong, who made an exit.