Reddit Signs $60M-Per-Year Google AI Deal Days Before Its IPO Filing
By Jeremy ·
Reddit has been on the internet for nearly 20 years. By the usual definition, it's not an emerging brand - it's one of the most visited websites in the world. But in the past few months it's been positioning itself as a source of valuable data in the AI training economy at exactly the moment it's preparing to go public. That's a different story than the one Reddit has been telling for most of its existence.
The $60 Million Deal
Reuters reported this week that Reddit has signed a deal with Google worth approximately $60 million per year. The contract gives Google access to Reddit's content for training its AI models. Reddit and Google both declined to comment when the report first published.
Google subsequently confirmed it's deepening its partnership with Reddit through what it describes as a cloud partnership and access to Reddit's Data API. Reddit gets AI-powered capabilities built on Google's Vertex AI platform. Google gets access to Reddit's Data API, which it says gives it "efficient and structured access to fresher information" and "enhanced signals" to better understand and surface Reddit content.
The API Irony
The full context of this deal requires going back to 2023. Reddit spent much of last year in a public standoff over API pricing, announcing it would charge for third-party access at rates most developers couldn't sustain. Several popular Reddit apps shut down as a result - Apollo being the most prominent. Reddit's stated reason at the time: AI companies were scraping its content to train large language models without compensating Reddit.
Reddit's solution to AI companies scraping its content for free was to charge for API access. The Google deal is the logical endpoint of that strategy applied to a company with the resources to pay. The logic is consistent. The contrast between independent developers getting priced out and Google getting structured API access for $60 million a year is hard to miss regardless.
IPO Timing
Reddit has been working toward a stock market listing for more than three years. The company is filing its prospectus this week, giving potential investors their first detailed look at its financials.
Advertising is Reddit's primary revenue stream, and it competes for those dollars against TikTok and Meta. The Google deal offers something structurally different: a predictable annual payment not subject to CPM fluctuations or brand safety concerns. It also gives the S-1 a line that tells investors Reddit's content archive has standalone monetary value - not just as context for ads, but as a data asset.
Whether Reddit will pursue similar deals with other AI companies isn't yet clear. If the Google contract sets a market rate for large-scale access to Reddit's archive, other companies training language models on text data may be next in line.
What Google Is Actually Buying
Reddit's appeal as an AI training source isn't complicated. The platform contains decades of human opinion, argument, lived experience, recommendation, and debate across practically every subject. That kind of content is difficult to produce synthetically and expensive to generate at scale.
The Data API gives Google something more structured and current than what a standard search crawl delivers. Per the announcement, the partnership doesn't change what Google already indexes and crawls publicly - the API access is a separate layer aimed at fresher, better-organized content.
For Reddit, the deal offers cash, cloud infrastructure, and a public narrative ahead of its IPO: the conversations on its platform are worth real money to the companies building AI systems. Whether that narrative holds as the training data market matures is a question for a different quarter.