Reddit, the popular platform for user-generated content, has entered into a licensing deal with an undisclosed large AI company, as reported by Bloomberg. The deal, valued at approximately $60 million annually, signifies a significant step towards securing legal legitimacy for AI companies that need access to data.
Previously, many AI companies collected data from the open web without proper authorization, raising legal concerns. Now, it appears that companies are actively seeking agreements with platforms like Reddit to ensure compliance. While the identity of the AI firm remains unknown, it is worth noting that the deal surpasses the reported offer of $5 million annually made by OpenAI to news publishers for their data. Furthermore, Apple has been engaging in multi-year deals with prominent news organizations, potentially amounting to a minimum of $50 million, according to The New York Times.
This recent development follows an announcement in October that Reddit had threatened to block Google and Bing’s search crawlers if it failed to establish a training data deal with AI companies. While the outcome of that negotiation is unclear, Reddit has demonstrated its willingness to take a tough stance in the past. In fact, the platform successfully navigated a significant protest when changes to its third-party API access pricing prompted the closure of popular Reddit apps by developers.
Despite showing growth with a 20 percent increase in year-over-year revenue by the end of 2023, Reddit fell short of its $1 billion revenue target by $200 million. As it prepares for a potential public offering in March, the company has been advised to target a $5 billion valuation. This is significantly lower than the projected $10–$15 billion valuation from its previous attempt to go public in 2021, which was hindered by market conditions.
The licensing deal between Reddit and the AI firm not only highlights the increasing importance of data legitimacy in the AI industry but also underscores Reddit’s determination to secure its position as it moves towards a public offering.
Frequently Asked Questions (FAQs)
1. What is the recent licensing deal between Reddit and an undisclosed AI company?
Reddit has entered into a licensing deal with a large AI company, worth about $60 million annually. The deal aims to ensure legal legitimacy for AI companies that require access to data and marks a shift towards seeking proper authorization rather than collecting data from the open web without consent.
2. What does this deal signify for AI companies?
This deal signifies a significant step towards securing legal compliance for AI companies. By seeking agreements with platforms like Reddit, AI companies ensure that they have proper authorization to access data, addressing previous legal concerns.
3. How does this deal compare to other offers made?
The deal between Reddit and the undisclosed AI firm surpasses the reported $5 million annual offer made by OpenAI to news publishers for their data. Apple has also engaged in multi-year deals with news organizations, potentially amounting to a minimum of $50 million.
4. What happened in October that led to negotiations between Reddit and AI companies?
In October, Reddit threatened to block Google and Bing’s search crawlers if it failed to establish a training data deal with AI companies. The outcome of that negotiation remains unclear, but it emphasizes Reddit’s willingness to take a tough stance.
5. How has Reddit addressed protests in the past?
Reddit successfully navigated a significant protest when changes to its third-party API access pricing prompted the closure of popular Reddit apps by developers. This demonstrates the platform’s ability to take firm action and make difficult decisions.
6. Did Reddit meet its revenue target in 2023?
No, despite a 20 percent increase in year-over-year revenue by the end of 2023, Reddit fell short of its $1 billion revenue target by $200 million.
7. What is Reddit’s valuation target for its potential public offering?
As Reddit prepares for a potential public offering in March, the company has been advised to target a $5 billion valuation. This is significantly lower than the projected $10-$15 billion valuation from its previous attempt to go public in 2021, which faced challenges due to market conditions.
Definitions:
– User-generated content: Content created and shared by users of a platform.
– Licensing deal: An agreement between two parties where one party grants the other party permission to use their intellectual property in exchange for a fee.
– AI (Artificial Intelligence) company: A company that develops and applies technologies related to artificial intelligence.
– Legal legitimacy: Complying with legal requirements and regulations.
– Authorization: Formal permission or consent.
– Data legitimacy: The lawful and authorized acquisition, use, and sharing of data.
Related Links:
– Bloomberg
– The New York Times
– Reddit
The source of the article is from the blog lanoticiadigital.com.ar