To bolster its revenue streams ahead of its much-anticipated stock market debut, social media giant Reddit has inked a lucrative deal with tech titan Google (GOOGL.O), insiders reveal.
Sources familiar with the matter disclose that Reddit has agreed to provide its vast array of content to Google, allowing the search engine behemoth to utilize it for training its Artificial Intelligence (AI) models.
The deal, valued at approximately $60 million annually, highlights Reddit’s proactive approach to diversifying its income amidst intensifying competition for advertising spending, notably from platforms like TikTok and Meta Platforms (META.O), formerly Facebook.
While neither Reddit nor Google have officially commented on the agreement, insiders, who preferred to remain anonymous, emphasize the significance of this collaboration. Bloomberg had previously hinted at Reddit’s content deal, although the identity of the buyer was not disclosed.
This development marks Reddit’s inaugural reported collaboration with a major AI corporation.
Last year, Reddit had announced its intention to monetize its application programming interface (API), the conduit through which it disseminates its content, by charging businesses for access.
Based in San Francisco and founded in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohanian, Reddit has become renowned for its diverse range of niche discussion forums, some boasting memberships in the tens of millions.
With Reddit poised to file for its initial public offering (IPO) this week, potentially revealing its financials to prospective investors for the first time, industry insiders eagerly anticipate the unveiling of its IPO filing, which could be available as early as Thursday.
Reports suggest that Reddit, which attained a valuation of approximately $10 billion in a funding round in 2021, aims to divest roughly 10% of its shares through the offering.