Home Reddit reportedly signs $60million annual deal with AI company

Reddit reportedly signs $60million annual deal with AI company

Reddit is allowing access to an “unnamed” artificial intelligence (AI) company ahead of the social platform’s initial public offering (IPO).

The deal, reported by Bloomberg is worth “about $60 million on an annualized basis” for AI models to be given access to Reddit’s material.

The move to allow an AI company into the nuts and bolts of content could be seen as a way to hook in more investors ahead of the platform making moves to enter the public trading domain, as we reported last month.

Bloomberg’s insider has said the “San Francisco-based firm told prospective investors in its IPO that it had signed the deal, worth about $60 million on an annualized basis, earlier this year.”

The move is an example of how important content licensing is becoming to AI companies that use source material to essentially feed the algorithms that create their outputs.

Due to several high-profile arguments about the validity of source materials of AI’s outputs, more and more companies are seeking official partnerships with registered businesses that AI algorithms hope to provide expertise on.

What is happening with Reddit’s IPO?

Steve Huffman, the Reddit CEO spoke about the possibility of an IPO late last year and mentioned that people attempting to use the platform to launch businesses could be a core part of the need to expand.

“People are trying to start businesses on Reddit, but it wasn’t built for that,” said Huffman to Fast Company in an interview last year, “So just trying to flesh out that ecosystem, I think that’ll be very powerful.”

Bloomberg has reported that 16 banks are involved in the Reddit IPO that is led by Morgan Stanley and Goldman Sachs Group Inc and also include “JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc.”

An IPO is the process of offering shares of a private corporation to the public after the company meets the requirements of the Securities and Exchange Commission (SEC). This is where the phrase “going public” originates from.

This stage of a company’s life cycle is where the early investors and shareholders agree that more money is needed to expand. So they lean on the expertise of banking institutions to take the share prices of a company into the public domain and the competitive seas of the stock market.

It helps these companies get better exposure and deals with loans and investments, but this also comes with increased transparency into accounting that must be disclosed publicly.

Image Credit:  Pexels.

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Brian-Damien Morgan
Tech Journalist

Brian-Damien Morgan is an award-winning journalist and features writer. He was lucky enough to work in the print sector for many UK newspapers before embarking on a successful career as a digital broadcaster and specialist. His work has spanned the public and private media sectors of the United Kingdom for almost two decades. Since 2007, Brian has continued to add to a long list of publications and institutions, most notably as Editor of the Glasgow 2014 Commonwealth Games, winning multiple awards for his writing and digital broadcasting efforts. Brian would then go on to be integral to the Legacy 2014,…

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.