Reddit's $60M-a-Year AI Data-Licensing Deal With Google
February 2024
In February 2024, days before its IPO, Reddit signed a content-licensing deal with Google reported at roughly $60 million per year, giving Google access via Reddit's Data API to train AI models on years of user content. The deal drew user unease over consent and triggered an FTC inquiry.
What happened
On February 22, 2024, Reddit confirmed a partnership with Alphabet's Google to license its archive of user-generated content for training Google's AI models, reported at about $60 million per year. Google gained structured, real-time access to Reddit conversations via the Data API, while Reddit gained AI tools to improve internal search. The announcement came just before Reddit publicly filed for its IPO, positioning AI data licensing as a key new revenue stream.
The deal capped a turbulent period: in 2023 Reddit had introduced steep new API fees aimed largely at AI developers, sparking a massive moderator blackout. CEO Steve Huffman framed both the API charges and the Google deal as matters of fairness, arguing companies should not extract value from Reddit's conversations for free. Critics countered that the content being sold was written by millions of users who never consented to, and were not compensated for, having their posts fed into commercial AI systems.
The consent question quickly drew regulatory attention. On March 14, 2024, Reddit disclosed that the U.S. Federal Trade Commission had opened a non-public inquiry into its sale, licensing, or sharing of user content to train AI. Reddit indicated it expected to recognize tens of millions of dollars from such licensing in 2024.
Impact
The Google deal helped legitimize a new market in which platforms sell user-generated content for AI training; Reddit followed it with a roughly $70 million OpenAI agreement. It also sharpened a broader debate about whether 'publicly available' posts can be commercialized for AI without the consent or compensation of the people who wrote them. The deal boosted Reddit's prominence in AI-driven search but exposed it to the FTC inquiry and to ongoing distrust among parts of its community already alienated by the 2023 API revolts.