In a series of rapid developments, Reddit announced an AI-development deal with Google and filed the right documents for an IPO.
The San Francisco-based social media Reddit posted two significant developments on Thursday: an AI training partnership with Google and the filing of an IPO. The two announcements were separate but conjoined in the intention of increasing market attention to the social network.
The AI training partnership will allow Google to train its large language models on Reddit conversation. Google is a major player in the AI landscape, recently unveiling its new software Gemini.
Gemini is a text-based AI software with advanced image-recognition capabilities as well. The software is set to rival OpenAI’s ChatGPT and is considered a breakthrough in generative AI technology.
With this partnership, Google will be allowed to train Gemini on Reddit’s countless human-to-human conversations, making the chatbot increasingly more realistic. Reddit is a social network designed to encourage conversations and debate.
In turn, Reddit will be able to use some of Google’s AI capabilities to help users find new communities. “Our work with Google will make it easier for people to find, discover, and engage in content and communities on Reddit that are most relevant to them,” Reddit’s statement on the partnership read.
Estimates suggest this partnership will grant Reddit $60 million, helping the site in its path to going public.
Reddit’s IPO
Contextually to Google’s partnership, Reddit filed to the SEC all the documents necessary for an Initial Public Offering (IPO). The documents revealed previously unknown financial attributes.
According to the filing, Reddit closed the last quarter of 2023 with a $18.5 million net profit, closing in green for the first time in two years. Quarterly revenues came in at $249.8 million.
Reddit aims at listing its shares on the New York Stock Exchange with the symbol RDDT.
The filing also revealed that OpenAI’s CEO Sam Altman has a significant share of the company, totaling more shares than Reddit’s CEO Steve Huffman. Altman will reportedly own 9.2% of the company, netting a few million dollars if and when the IPO falls through.
Sam Altman founded several start-ups over the years, including Airbnb and Dropbox. According to a 2014 blog post he made, Altman invested $50 million in Reddit after using the service for over 9 years. Later in the year, Altman poured an additional $10 million after his initial investment profited 45% ROI.
According to CNBC, Altman sat on Reddit’s board as late as 2021. “Sam was an incredible board member and provided invaluable support and counsel to Reddit and myself over the years," CEO Huffman said.
Altman is considered a leading figure in the development of AI, and will likely indirectly profit from Reddit’s agreement with Google as well.
