According to an AP story, Reddit said on February 22 that it had reached a $60 million agreement with Google, enabling the tech giant to use posts from the online discussion platform to train its artificial intelligence (AI) models and improve services like Google Search. Reddit says it will go public in a few months and has a $60 million agreement with Google to train AI using its posts. Reddit noted that as part of the deal, it will have access to Google AI models to improve other functions including its internal site search.
Questions were not answered by Reddit.
The San Francisco-based business revealed preparations for its initial public offering (IPO) in a different statement. The company intends to list RDDT as its ticker on the New York Stock Exchange for its shares.
On February 21, it also revealed a net income of $18.5 million for the October–December quarter, which represented its first profit in the previous two years. During the same time frame, Reddit brought in $249.8 million. The US SEC received a file including these figures.
IPO Plans Show Reddit’s Relationship with Sam Altman of OpenAI
According to the regulatory filing describing OpenAI’s plans for an IPO, Reddit now has a sizable shareholder in its CEO, Sam Altman, according to Bloomberg.
8.7% of Reddit’s outstanding shares are held by entities associated with Altman, according to the S-1 filing that was made public on February 22. According to the Bloomberg report, this ownership consists of 11.4 million Class B shares and 789,456 Class A shares.
Significantly, with almost one-third of the voting power, the Newhouse family publishing empire’s Advance Magazine Publishers Inc. owns the bulk of Reddit’s shares.
As a member of the first class at the Y Combinator accelerator in 2005, Altman has a strong relationship with the San Francisco-based social media company, having joined Reddit co-founders Steve Huffman and Alexis Ohanian. In addition, Altman took on a temporary role as the company’s acting CEO for eight days after Yishan Wong, the previous CEO, resigned.
Google Partnership: An Important Step for Reddit
Reddit, a website renowned for its decentralized conversations run by volunteer moderators, is taking a big step forward with this partnership. These moderators have previously demonstrated against business decisions, such as when Reddit intended to charge third-party apps for content access, leading to a partial site outage.
In contrast to other social media sites, Reddit does not utilize automated procedures to anticipate user preferences; rather, users actively seek out their favored discussion groups, an insider informed AP.
The insider went on to say that Google will abide by Reddit’s user terms and privacy policy thanks to this arrangement. Interestingly, Reddit takes a different tack than other social media sites when it comes to user content removal. Reddit users remove all traces of their posts completely, leaving no trace behind.
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This policy also requires Reddit partners, such as Google, to honor the decisions made by users on the platform.
Data Sharing: Google Win-Win Situation
The data-sharing agreement is extremely important to Google since it gives it access to material created by people, which it can use to train its AI models to understand the world and provide better conversational responses.
Google highlighted in a press statement that Reddit is a storehouse of real human interactions and experiences and emphasized its dedication to making important information more easily accessible.
Google emphasized its objective of expediting customer access to Reddit content, like product suggestions and travel assistance, through Google products, while downplaying its focus on AI training. This strategy, which the firm described as “more content-forward displays of Reddit information,” aims to improve both user engagement on Reddit and Google’s toolkit.