Reddit strikes a $60 million deal allowing Google to train AI models on its posts and unveils IPO plans.
Reddit has reached an agreement with Google that allows the search engine giant to use postings from the online discussion site to train artificial intelligence models and improve services like Google Search.
The agreement, announced Thursday and valued at approximately $60 million, will also grant Reddit access to Google AI models for enhancing internal site search and other capabilities. Reddit refuses to comment on or respond to inquiries about the purchase beyond its written statement.
Separately, the San Francisco-based startup unveiled plans for its IPO on Wednesday. According to filings filed with the Securities and Exchange Commission, Reddit recorded net income of $18.5 million in the October-December quarter, its first profit in two years, on $249.8 million in revenue. The business stated that it aims to list its shares on the New York Stock Exchange under the ticker symbol RDDT.
The Google acquisition is a significant move for Reddit, which relies on volunteer moderators to manage its vast network of freewheeling topic-based discussions. Those moderators have publicly criticized previous Reddit choices, most recently blacking down much of the site for several days when Reddit announced intentions to begin charging third-party apps for access to its content.
According to a source familiar with the situation, the agreement with Google does not portend any data-driven changes to how Reddit operates. This individual requested anonymity in order to speak freely during the SEC-mandated “quiet period” preceding an IPO. Unlike TikTok, Facebook, and YouTube, Reddit does not employ algorithmic techniques to estimate what viewers will be most interested in seeing.
The source also stated that the deal requires Google to follow Reddit’s user terms and privacy policies, which differ in several respects from other social media platforms. For example, when Reddit users delete their posts or other content, the service deletes everything completely, leaving no ghostly traces in unexpected spots. Reddit’s partners, such as Google, must do the same in order “to respect the choices that users make on Reddit,” according to the individual.
The data-sharing agreement is also significant for Google, which is eager to gain access to human-written material that it can use to train its AI models to increase their “understanding” of the world and thus their ability to respond to inquiries in a conversational manner.
In a news statement, Google complimented Reddit, calling it a repository for “an incredible breadth of authentic, human conversations and experiences” and emphasizing that the search giant’s primary goal is “to make it even easier for people to benefit from that useful information.”
Google downplayed its interest in utilizing Reddit data to train its AI systems, focusing instead on how it will make it “even easier” for consumers to obtain Reddit content, such as product recommendations and travel advice, by channeling it through Google products.
It defined the process as “more content-forward displays of Reddit information” with the goal of benefiting both Google’s products and making it easier for individuals to contribute on Reddit.
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