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In a strategic move ahead of its anticipated stock market debut, social media platform Reddit has entered into a lucrative agreement with Google, allowing the tech giant access to its vast content for training artificial intelligence models.
The deal, valued at approximately $60 million annually, highlights Reddit’s efforts to diversify revenue streams amidst stiff competition in the digital advertising landscape dominated by platforms like TikTok and Meta’s Facebook.
Talking anonymously, sources familiar with the matter disclosed the significant contract between Reddit and Alphabet-owned Google.
The collaboration underscores Reddit’s proactive approach to monetization as it gears up for its highly anticipated IPO.
Amid preparations for its stock market launch, Reddit has explored various avenues to bolster its financial standing.
Last year, the platform announced plans to charge companies for access to its application programming interface (API), marking a strategic shift in its revenue model.
The partnership with Google represents Reddit’s first major deal with a leading AI company, signaling its commitment to innovation and growth.
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With its IPO filing expected to be unveiled imminently, Reddit is poised to provide potential investors with comprehensive insights into its financial performance for the first time.
The filing, anticipated to be released as early as Thursday, will offer crucial information for stakeholders evaluating the platform’s market value and growth prospects.
Reddit’s market debut, slated to sell approximately 10% of its shares, comes at a time of heightened investor interest in social media companies.
The platform, valued at $10 billion following a funding round in 2021, seeks to capitalize on favorable market conditions and investor appetite for digital platforms.
The collaboration between Reddit and Google underscores a broader trend in the tech industry, with AI companies increasingly leveraging content partnerships to enhance their machine-learning capabilities.
By accessing Reddit’s diverse array of user-generated content, Google aims to enrich its AI models and improve their accuracy and performance.
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