Social media platform Reddit has struck a deal with Google to make its content available to train the search giant’s artificial intelligence models, three people familiar with the matter said.

The contract with Alphabet-owned Google is worth around $60 million (roughly Rs 497 crore) per year, according to one of the sources.

The deal highlights how Reddit, which is gearing up for a high-profile stock market launch, is looking to generate new revenue amid fierce competition for ad dollars from the likes of TikTok and Facebook on the Meta Platform.

The sources were not authorized to speak to the media and declined to be identified.

Reddit and Google declined to comment.

Bloomberg previously reported the Reddit content deal without naming the buyer.

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 Google deal is the first reported deal with a major artificial intelligence company.

San Francisco-based Reddit, which has been seeking an IPO for more than three years, is preparing to make its initial public offering this week, which will provide details of its financials for the first time to potential IPO investors.

The documents could be available as early as Thursday, two of the sources said.

The company, which was valued at around $10 billion (roughly Rs 82,897 crore) in a 2021 funding round, is looking to sell around 10 percent of its shares in the offering, Reuters reported earlier.

Reddit’s stock market launch will mark the first IPO of a major social media company since Pinterest went public in 2019.

AI modelers have been busy making deals with content owners in recent months as they seek to diversify their training data beyond the big internet scraps. This practice is fraught with potential copyright issues, as many content creators claim their content is being used without permission.

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

© Thomson Reuters 2024

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