Reddit strikes a deal to sell user content to large AI company for $60 million a year

Over the past two decades, Reddit users have created a trove of content, sharing thoughts, ideas, memes, and other creations without financial reward. Now, this valuable data has reportedly been licensed for AI training, sparking backlash and a wave of criticism over its commercial exploitation.

According to a recent Bloomberg report, Reddit has inked a deal worth a staggering $60 million annually, granting an undisclosed major AI firm access to its treasure trove of user content. This move has stirred up controversy and reignited concerns about privacy and data protection. The decision reportedly followed considerations of blocking Google search crawlers if a suitable AI data deal couldn’t be struck.

Sources familiar with the matter revealed to Bloomberg that Reddit disclosed the deal to potential investors as part of its IPO pitch earlier this year. The agreement, which remains shrouded in secrecy regarding the identity of the AI company involved, could set a precedent for similar contracts in the future, according to insiders.

“Reddit Inc. has signed a contract allowing a company to train its artificial intelligence models on the social media platform’s content, according to people familiar with the matter, as it nears the potential launch of its long-awaited initial public offering. 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 people said. Reddit’s agreement with an unnamed large AI company could be a model for future contracts of a similar nature, one of the people said,” Bloomberg reported.

The implications of this deal are significant. As AI technology continues its rapid advancement, fueled by massive amounts of human-generated data, questions about data privacy and ownership become increasingly urgent. While giants like Meta and X pursue their AI ambitions internally, platforms like Reddit seem inclined to cash in on the external value of their user data.

Is Your Reddit Data Safe for Privacy?

The debate over the safety and privacy of Reddit data in the face of commercialization underscores broader concerns about the ethical use of user-generated content in the AI era. As the digital landscape evolves, users are left to wonder whether their contributions to online platforms are truly secure from exploitation.

The news of Reditt’s AI content licensing deal comes less than a year after the social aggregation site laid off 90 employees, or about 5% of its workforce. Reddit CEO Steve Huffman also stated at the time that the company would scale down its hiring plans to about 100 individuals, down from the initial target of 300.

Reddit has been growing exponentially since its inception 16 years ago. Today, Reddit has almost 2 billion in monthly traffic. The social news aggregation site has grown to become one of the 25 most-visited websites in the world and the 7th most-visited website in the U.S., according to Alexa Internet data as of February 2021.

Co-founded in 2005 by Alexis Ohanian, Reddit is a social news aggregation, web content rating, and discussion platform. As of October 2020, Reddit ranks as the 17th-most-visited website in the world and the 7th most-visited website in the US, according to Alexa Internet.