Reddit sells training data to unnamed AI company ahead of IPO

On Friday, Bloomberg reported that Reddit has signed a contract allowing an unnamed AI company to train its models on the site's content, according to people familiar with the matter. The move comes as the social media platform nears the introduction of its initial public offering (IPO), which could happen as soon as next month.

Reddit initially revealed the deal, which is reported to be worth $60 million a year, earlier in 2024 to potential investors of an anticipated IPO, Bloomberg said. The Bloomberg source speculates that the contract could serve as a model for future agreements with other AI companies.

After an era where AI companies utilized AI training data without expressly seeking any rightsholder permission, some tech firms have more recently begun entering deals where some content used for training AI models similar to GPT-4 (which runs the paid version of ChatGPT) comes under license. In December, for example, OpenAI signed an agreement with German publisher Axel Springer (publisher of Politico and Business Insider) for access to its articles. Previously, OpenAI has struck deals with other organizations, including the Associated Press. Reportedly, OpenAI is also in licensing talks with CNN, Fox, and Time, among others.