No More Freeloading: Reddit Wants To Be Paid For AI Training

Reddit, with its vast data pool of human conversations about every imaginable topic collected over the last 18 years, is one of the best tools to use to train large language models (LLMs) like OpenAI’s famous ChatGPT.

The company has decided to finally benefit from all the AI action and announced on Tuesday that it will introduce a “new premium access point for third parties who require additional capabilities, higher usage limits, and broader usage rights,” i.e. it will soon begin charging for access to its application programming interface (API).

READ: Twitter Will Start Charging For Its API Next Week And People Are Furious

“The Reddit corpus of data is really valuable,” Reddit founder and chief executive Steve Huffman told The New York Times on Tuesday. “But we don’t need to give all of that value to some of the largest companies in the world for free.”

The company has yet to unveil details, including pricing, for this premium access point targeted to big companies like OpenAI, Microsoft, and Google, but Reddit said that they will be notifying most developers and third parties about the new terms via email, and these terms will take effect after a 60-day notice period. They have also indicated that the pricing will be split into tiers, to help support varying needs.

“Crawling Reddit, generating value, and not returning any of that value to our users is something we have a problem with,” Huffman said. “It’s a good time for us to tighten things up.”

“We think that’s fair,” he added.

The API would still be accessible for free to developers seeking to build applications that would help improve the core experience of using the platform, as well as researchers seeking to study Reddit data for academic and noncommercial purposes.

Those who use the API for creating and maintaining content moderation tools will also need not worry about paying for access. The company is creating dedicated tools via iOS and Android apps with a mod log, rules management tools, and additional mod queues.

The decision to create a new revenue stream from the commercial use of its API isn’t just about partaking in the profits that AI developers training their models on the platform are poised to rake in. It’s a big move to attract shareholders if Reddit pushes through with an IPO later this year.  

The Information reported in February that Reddit is looking to go public in the second half of 2023, likely just waiting it out until market conditions improve. The past year has been a painful one for IPOs, with proceeds falling 93%.

Reddit also secretly filed an IPO with the US Securities and Exchange Commission in 2021 after the platform blew up with the meme stock frenzy. At the time, the company was valued at around $10 billion, with an estimated $350 million in revenue from ads.

Information for this story was found via Reuters, TechCrunch, Reddit, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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