Reddit Inc. has allegedly signed an agreement that would enable another firm to train its AI models using material from the social media platform, according to sources familiar with the situation. This comes as Reddit prepares for what may be the launch of its highly anticipated initial public offering, aka IPO.
According to the people in charge, the San Francisco-based company reportedly informed potential IPO backers early this year that it had inked the arrangement, which is valued at around $60 million per annum. Someone mentioned that future contracts of a similar nature might be modeled after Reddit arranges an undisclosed significant AI company.
A source close to the situation has said that Reddit’s income for the year surpassed $800 million, marking a 20% rise from its 2022 total. Reddit may be able to capitalize on investors’ excitement for artificial intelligence (AI) and increase its initial public offering (IPO) if it can ride the AI wave that is now sweeping the business sector.
According to Bloomberg News, the business may conduct its initial public offering (IPO) as early as next month. Advisors have suggested valuing the company at least $5 billion. For more, see Reddit’s revenue surges 20% before IPO, yet the company still hasn’t turned a profit.
Details of the offering and the AI arrangement may change, according to the sources who asked not to be named since the information isn’t public and discussions surrounding the IPO are still on. No remark was offered by a Reddit official.
Data licensing arrangements have been struck between content producers looking for new revenue streams and AI businesses that are keen to train their systems on data. According to a Bloomberg News article, OpenAI and Axel Springer SE, a German media behemoth, reached an agreement for AI training worth tens of millions of euros in December.
According to Bloomberg News, the firm that developed ChatGPT is reportedly in discussions to license content from publications, including CNN, Fox Corp., and Time. This content would be used to feed data into the startup’s artificial intelligence chatbots, allowing them to provide more accurate, relevant, and current results.
The IPO is being developed by approximately sixteen institutions, spearheaded by Goldman Sachs Group Inc. and Morgan Stanley. The agreement also includes Citigroup Inc., Bank of America Corp., and JPMorgan Chase & Co.
