An AI startup and Reddit are said to have inked a multi-million dollar content licensing agreement

Have you ever commented or posted on Reddit?

According to Bloomberg, artificial intelligence businesses will soon exploit your speech to train their algorithms. Prior to its anticipated initial public offering (IPO), the website purportedly disclosed to prospective investors that it had inked a transaction “worth about $60 million on an annualized basis” early this year. The “large AI company” that Reddit is paying millions of dollars for access to its content is not identified by Bloomberg, but their deal may serve as a template for similar agreements in the future that might result in multiple million deals for the company.

Reddit initially stated that it will start charging firms for API access in April of last year. It said at the time that price will be divided into categories so that even small businesses may afford to pay. Companies require API access to train their chatbots on posts and comments from subreddits on a wide range of topics, many of which were made by actual people over the last 18 years. However, that API is also utilized by other developers, including some that provide customers third-party clients that are arguably superior to Reddit’s official app. Thousands of communities shut down last year in protest, causing stability concerns for the entire service.

Reddit might go public as early as next month, with a $5 billion value. According to Bloomberg, the website might persuade investors who are still hesitant to participate by demonstrating that it can generate a lot of money and expand its income through partnerships with AI businesses. After all, the companies driving generative AI technologies are working with multiple partners to upgrade their large language models (LLMs). OpenAI, for example, has already signed an arrangement to utilize Business Insider and Politico stories to train its AI models. Bloomberg reports that it is also in negotiations with several publications, including CNN, Fox Corp, and Time.

OpenAI is now facing various lawsuits accusing it of utilizing information without the express authorization of copyright holders, including one filed by The New York Times in December. The AI business earlier told Engadget that the lawsuit was unexpected, citing continuing “productive conversations” with the newspaper over a “high-value partnership.”