Reddit Seeks To Strike Next AI Content Pact With Google, OpenAI

Reddit Inc. is in early talks to strike its next content-sharing agreement with Alphabet Inc.’s Google, aiming to extract more value from future deals now that its data plays a prominent role in search results and generative AI training.

Reddit, more than a year and a half after its first data-sharing deal with Google for a reported $60 million, is in talks for deeper integration with Google’s AI products, according to executives familiar with the discussions. It’s proposing a new kind of partnership that would encourage users to become active contributors to Reddit’s popular online forums, so Google traffic could help the company grow and generate content for future training.

Reddit also plans to discuss with Google and OpenAI, which has a similar agreement, a future deal structure that could allow for dynamic pricing, where the social platform can be paid more as it becomes more vital to AI answers, said the executives, who asked not to be named discussing private conversations.

The discussions, which have not previously been reported, mark an attempt by Reddit to shift away from purely transactional licensing agreements. Typically, AI companies pay a specific amount to showcase Reddit content within their AI products or to train their AI models. But Reddit believes these terms don’t adequately reflect how valuable their data has been to these platforms, the executives said. 

Reddit’s first data agreements with Google and OpenAI remain active. In January 2024, Reddit reached licensing agreements, including those two deals, that would generate $203 million in contract value with terms ranging from two to three years, according to a document Reddit filed in advance of its initial public offering last year.

Reddit, Google and OpenAI declined to comment on discussions related to future potential agreements.

Large language models, which underpin OpenAI’s ChatGPT as well as Google’s search feature AI Overviews and its Gemini assistant, are trained on massive datasets scraped from the internet. Reddit, with its unique format that allows for in-depth, user-generated discussions on an array of niche topics and human experiences, is a valuable source of information for training AI models, as well as informing AI chatbots’ responses to users’ real-time requests, sometimes including links to Reddit threads.

Such licensing agreements are becoming more common as AI companies seek legal ways to train their models. OpenAI has also struck a series of partnership agreements with major media publishers such as Axel Springer SE, Time and Conde Nast to use their content in ChatGPT. 

Other content groups allege that various AI model companies have illegally used their data already. Publishers including The New York Times Co. and Penske Media have decided to sue OpenAI and Google, respectively, alleging that the companies have improperly obtained their work without permission, driving traffic away from their websites. 

Reddit has also sued OpenAI rival Anthropic, alleging the AI startup illegally scraped its data to train Anthopic’s AI models. Anthropic recently agreed to pay at least $1.5 billion to a group of authors in one of the largest copyright settlements in US history.

Reddit remains among the most cited sources across AI platforms, according to analytics company Profound AI. However, Reddit executives have noticed that traffic coming from Google has limited value, as users seeking answers to a specific question often don’t convert into becoming active Redditors, the people said.

Now, Reddit is engaging with product teams at Google in hopes of finding ways to send more of its users deeper into its ecosystem of community forums, according to the executives. In return, Reddit is looking for ways to provide more high-quality data to its AI partners. Discussions between Reddit and Google have been productive, the people said. 

“We’re midflight in our data licensing deals and still learning, but what we have seen is that Reddit data is highly cited and valued,” Reddit Chief Operating Officer Jen Wong said on July 31 during a call with investors. “We’ll continue to evaluate as we go.”