Reddit seeks to renegotiate its agreement with Google for more effective data monetization
According to Bloomberg, Reddit is back at the negotiation table with Google, a year and a half after signing an initial contract estimated at $60 million per year.
The goal is clear: to secure more funding and, importantly, increase user engagement, as its data becomes a central pillar for training AI models.
Reddit, An AI Goldmine
In an internet saturated with artificially generated content, Reddit stands out for its unique value. Posts are written by real users, organized by themes, and ranked through a human voting system. The result is an authentic, structured corpus that is extremely useful for training language models.
It’s no surprise that Reddit has become the most cited source in AI tools such as Perplexity or Google’s AI Overviews. Even users know that typing “keyword + reddit” in Google yields more relevant answers.
A New Pricing Model Under Consideration
Reddit believes that current terms do not reflect the true value of its data. The platform is considering a dynamic pricing system, where the amount paid by Google (or OpenAI and other partners) would directly depend on the utility and significance of the content used in AI-generated responses.
However, the stakes extend beyond just financial gains. Reddit also wants Google to help drive users back to its forums. Currently, many users are satisfied with reading an AI-generated answer—often derived from Reddit content—without ever visiting the site or contributing. This poses a risk; without new posts, the pool of fresh data may dwindle, jeopardizing Reddit’s inherent value.
The Paradox of AI Deals
This renegotiation perfectly illustrates the dilemma facing platforms:
- They possess the essential data required by AI giants.
- Yet, once exploited by these models, they lose traffic and engagement—their vital lifeblood.
Therefore, Reddit is striving to find a balance: to capitalize on its value for AI while preventing AI from undermining the ecosystem that makes it valuable.
