Reddit And Google Team Up In $60 Million Deal To Train Search Giant's AI Models: Report

To enhance its artificial intelligence (AI) capabilities, Google GOOGL has reportedly inked a $60 million annual deal with Reddit.

What Happened: The social media platform Reddit has entered into a content licensing agreement with Google, according to three sources familiar with the matter, Reuters reported. The deal will allow Google to use Reddit’s content to train its AI models.

The contract, valued at approximately $60 million per year, comes at a crucial time for Reddit, which is gearing up for a highly anticipated stock market debut. The platform is striving to diversify its revenue streams amidst stiff competition for advertising revenue from the likes of TikTok and Meta Platforms’ Facebook.

Reddit’s decision to charge companies for access to its application programming interface (API) was announced last year. The deal with Google marks the platform’s first reported agreement with a major AI company.

At the time of publishing the article, Reddit and Google are yet to respond to the queries sent by Benzinga.

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Reddit is expected to file for its initial public offering (IPO) this week, providing potential investors with a first look at its financials. The company, valued at around $10 billion in a 2021 funding round, is reportedly planning to sell about 10% of its shares in the offering.

Why It Matters: The deal between Reddit and Google is significant as it comes amid a flurry of AI-related developments at Google. The tech giant is reportedly preparing to roll out new subscription plans for its Google Workspace business clients, featuring its most advanced AI model, 1.0 Ultra in Gemini, and enterprise-level data security.

However, Google’s AI capabilities have also faced criticism. The company’s Gemini chatbot has been called out for generating irrelevant images or refusing to do so, raising concerns about the accuracy and reliability of Google’s AI technology.

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