Reddit signs licensing deal to allow its content to be used to train AI models

Social news site Reddit is set to enter into a new licensing deal with a 'major unnamed AI company' to grant the company access to user-generated content, Bloomberg reports. The deal is reportedly worth $60 million per year.

Reddit Is Said to Sign AI Content Licensing Deal Ahead of IPO - Bloomberg
https://www.bloomberg.com/news/articles/2024-02-16/reddit-is-said-to-sign-ai-content-licensing-deal-ahead-of-ipo

Reddit reportedly signed a multi-million content licensing deal with an AI company
https://www.engadget.com/reddit-reportedly-signed-a-multi-million-content-licensing-deal-with-an-ai-company-124516009.html

Reddit has a new AI training deal to sell user content - The Verge
https://www.theverge.com/2024/2/17/24075670/reddit-ai-training-license-deal-user-content

AI companies have been scraping any data available on the internet to train their AI models without permission from the platforms, but media companies like The New York Times have changed their terms of service to prohibit their content from being used to train AI.

The New York Times bans use of its articles for AI training in principle, and considers legal action against OpenAI - GIGAZINE

In response to these changes, AI developers are entering into licensing agreements with companies to legally obtain data to use in training AI models. For example, OpenAI has revealed that it is offering news publishers $1 million to $5 million per year in licensing fees.

Will OpenAI pay $1 million to $5 million a year in licensing fees to media that use its content to train AI?

The New York Times also reported that Apple is in talks with multiple media outlets to sign 'multi-year contracts worth more than $50 million' to train its own AI models.

It turns out that Apple has discussed multi-year deals worth over $50 million with various media outlets to train generative AI on news articles - GIGAZINE

According to Bloomberg, Reddit has signed a licensing agreement with an 'anonymous major AI company' that allows the company to use its content to train AI models. Reddit plans to IPO in March 2024, but Bloomberg reported that the company informed investors of the licensing agreement ahead of the IPO. Engadget, an overseas media outlet, noted that the licensing agreement 'could serve as a model for multiple licensing agreements that Reddit will enter into in the future.'

In addition, it was reported in October 2023 that Reddit was threatening to block search crawlers if it did not enter into a licensing agreement with Google and Bing.

As of the end of 2023, Reddit's sales had increased 20% year-on-year. However, it was $200 million short of its 2022 goal of $1 billion in annual sales. Reddit is planning an IPO, but it has been pointed out that showing that it can expand sales through licensing agreements could help persuade investors who are wary of the company's IPO.