Steve Huffman, the CEO of Reddit, has claimed that the website’s vast library of human conversations are a critical input for artificial intelligence, leading him to call it “the fuel” powering your favorite AI bot. Unlike other tech firms, Reddit has not needed to build its own AI to benefit from the AI revolution, instead it charges for access to its API.
Talking to CNBC’s Jim Cramer on Mad Money, Huffman said:
“There’s no artificial intelligence without actual intelligence. The knowledge has to come from somewhere, and Reddit is one of the primary sources for that sort of information that AI’s crave, but also that people crave. We’re a lightweight company. We’re not building data centers … we’re building a consumer product for people. People want what Reddit has. What we’ve seen over the last couple of years with the rise of AI is that the whole market now is learning that Reddit is the fuel for it.”
It is true that a large part of the information that AI pulls from the internet when answering queries and data used when it is being trained, mainly because it is full of unique, user-generated data that isn’t available elsewhere on the internet.
Huffman’s comment came after the company shared “standout” quarterly earnings that caused shares to go up 9% in extended trading. CNBC reported that the company’s revenue jumped 69% year over year to $663 million and daily active users climbed 17% to 126.8 million. Reddit’s capital expenditures was around $1 million for the quarter, which is a tiny amount compared to what hyperscalers are investing in compute and data centers to power their AI models.
Most of the revenues that Reddit took in during the quarter were actually from advertising, rather than selling users’ post history for AI training. It will be interesting to watch whether Reddit faces any sort of backlash for allowing its data to be used for training.
Source: CNBC