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Reddit Makes 203 Million in Data Licensing

Reddit, the popular internet discussion “community of communities,” filed a registration statement for its

long-awaited initial public offering.

The number of shares to be offered and the price range for the proposed offering have not yet been determined. Reddit intends to list its Class A common stock on the New York Stock Exchange under the ticker symbol “RDDT.”

In the S-1 filing with the SEC, Reddit reported 2023 revenue of $804.0 million, up 21% year over year, and a net loss of $90.8 million in 2023, compared with a $158.6 million loss the year prior.

Artificial intelligence will become an important part of Reddit Inc.’s business, the company said Thursday in its long-awaited filing for an initial public offering — tapping into a revenue stream that could be both lucrative and controversial.

“In January 2024, we entered into certain data licensing arrangements with an aggregate contract value of $203.0 million and terms ranging from two to three years,” the prospectus reads. “We expect a minimum of $66.4 million of revenue to be recognized during the year ending December 31, 2024 and the remaining thereafter.”

Value of Reddit’s Data

Reddit’s data holds immense value for AI models, as it serves as a rich source for training in various domains such as essays, code, emails, and articles. The platform’s expansive corpus of conversational data and knowledge is seen as pivotal in enhancing and refining large language models. Reddit’s real-time access to evolving topics and dynamic content further enhances its appeal for AI training purposes.

Impact on Content Producers and AI Vendors

The surge in data licensing agreements between content producers and AI vendors reflects a broader trend in the industry. As AI-powered chatbots and search engines threaten to divert traffic, content producers are increasingly turning to licensing agreements to safeguard their interests. Simultaneously, AI vendors are facing legal challenges and are seeking formal agreements to access data for training their models.


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