Reddit signs multi-million deal to supply content for AI training ahead of its IPO

Reddit has officially entered into a contract enabling an unnamed company to utilize the social media platform's content for the training of its artificial intelligence (AI) models. The deal, disclosed to prospective investors in Reddit's impending initial public offering (IPO), is reportedly valued at approximately $60 million annually.

The announcement comes as Reddit prepares for its IPO, a process that has been unfolding for over three years. The launch will mark the first IPO of a major social media platform since Pinterest's debut in 2019.

The agreement between Reddit and the AI firm could potentially serve as a template for future contracts of this kind. It marks a shift in the AI industry, which has traditionally trained its models on data from the open web, often without explicit permission. This practice has recently come under legal scrutiny, prompting companies to seek more legitimate sources of data.

The contract follows an October report that Reddit was contemplating blocking search crawlers from Google and Bing unless it could secure a deal with AI companies to use its training data. This latest development indicates a strategic move by Reddit to monetize its data while also complying with legal requirements.