On February 22, Reddit (NASDAQ: RDDT) and Google (NASDAQ: GOOGL) announced that they would deepen their partnership.
“We are excited to announce a new cloud partnership that will allow Reddit to integrate new AI-based capabilities using Vertex AI. “Reddit plans to use Vertex AI to improve search and other features on the Reddit platform,” Google announced.
“This enhanced collaboration will enable Google to provide an efficient, structured way to access Reddit’s vast existing content, support new ways for Google to surface Reddit content using the Reddit Data API, and provide a more efficient service. We have been able to improve our products and services, including: How to train a model,” Reddit said.
Benefits of AI Partnerships
Google plans to use Reddit’s content to train its AI models, and Reddit plans to leverage Google to ensure that Reddit-based content appears high in Google’s search engine.
The partnership must be mutually beneficial to both parties. For Google, training an AI model requires a lot of data, and the quality of the model, or rather what it outputs, is only as good as the quality of the data it was trained on.
Reddit has 70 million daily active users, with about 850 million users using it once a month. Each of these users generates rich data points from the posts they write and comment on in the communities they join. Google knows that these human-generated data points are invaluable when training its models, and they experience significant benefits. This is because the data you can provide to your model is data that is not easily accessible to others.
In the case of Reddit, the platform does not use the same algorithms that most social media websites use to surface content that may be of interest to users. Instead, Reddit users should naturally discover or encounter content that may be of interest to them. , increased visibility through Google products will benefit Reddit in terms of finding new communities and content of interest to the platform and its users.
That said, both Reddit and Google’s announcements seem to downplay the purpose of expanding their partnership. If I had to guess, it’s because neither company wants the world to worry that the data they generate through their Reddit accounts is going directly to Google. This is similar to how many social media users are afraid of giving their data to platforms owned and operated by Mark Zuckerberg.
For the convenience of users, Reddit and Google have explicitly stated that this new partnership does not change Reddit’s Data API Terms or Developer Terms and that content accessed through Reddit’s Data API may not be used for commercial purposes without Reddit’s approval. Yes.
Why tech giants and content platforms are forming strategic partnerships
This isn’t the first time we’ve seen companies creating AI models partner with content platforms to access better and richer data sets to train their AI models. Earlier this year, we saw OpenAI partner with media company Axel Springer to give the AI company access to their extensive archive of work to train language models.
It’s likely that this won’t be the last time we see a partnership of this nature. Big tech companies, especially those creating AI models, will want access to data that can train their models to continue improving their AI capabilities. On the other side of this equation, platforms that generate significant amounts of content can benefit from the increased preference and visibility that these AI models and search engines provide to their content.
Reddit’s IPO ambitions
A Reddit-Google partnership would benefit users of both platforms, but Reddit’s plans to take the company public could be a bigger impetus for such a large-scale public partnership.
Shortly after Reddit announced its partnership with Google, the company announced that it had filed for an IPO under the ticker “RDDT.” Reddit is valued at about $10 billion and has raised about $1.3 billion in funding, according to PitchBook. As Reddit prepares to enter the public markets, its new partnership with Google will likely make it more attractive to potential investors. Improved content discovery can also drive user growth, another key metric investors monitor closely.
We will see the impact of our partnership take shape over the coming months. Additionally, we could see companies mirroring Reddit’s strategy and partnering with AI model producers to infuse or benefit from integrated or adjacent AI capabilities into their products and services. Because developing AI models internally is a costly and resource-intensive endeavor, companies will choose to form alliances with players that dominate the AI space so they can get down the road to AI innovation quickly, efficiently, and cost-effectively. .
Specific details about Reddit’s upcoming IPO are still scarce, but there are rumors that the company could go public as early as March 2024.
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