Reddit has reportedly struck a licensing deal with a major artificial intelligence (AI) company, as per Bloomberg's recent report. This agreement is valued at around USD 60 million annually. Reddit has informed potential investors about the deal, which is still subject to change amid ongoing discussions regarding the IPO, anticipated to take place in March.
This content licensing arrangement reflects the growing interest in AI, with Reddit's deal potentially serving as a blueprint for similar future contracts, Bloomberg notes.
If Reddit's IPO materializes, it would mark the first major social media company to go public since Pinterest in 2019. The San Francisco-based platform, valued at approximately USD 10 billion in a 2021 funding round, has seen its year-over-year revenue increase by 20 percent by the close of 2023, though it fell short of a previously set USD 1 billion revenue target. Advised to aim for a USD 5 billion valuation, Reddit's public offering is expected to occur in March, with a valuation considerably lower than the USD 10–USD 15 billion range projected during its 2021 IPO filing, which was hindered by market conditions.
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