With Google reportedly paying $60 million, OpenAI is estimated to pay around $70 million annually to access Reddit’s data.

Reddit’s Chief Operating Officer, Jen Wong described this revenue stream as “material” to the company’s finances.

“It’s a small part of our revenue – I’ll call it 10 per cent. For a business of our size, that’s material because it’s valuable revenue,” Wong told Adweek.

Reddit has maintained a selective approach in choosing AI developers to collaborate, ensuring that licensing agreements meet specific conditions. These include user privacy protections and stipulations regarding how Reddit is represented, Wong said.

Despite the significance of these AI licensing deals, Reddit continues to derive the majority of its income from advertising.

The company reported a 71 per cent year-over-year increase in fourth-quarter revenue, reaching $427.7 million, largely due to the expansion of its advertising business. Ad revenue alone grew by 60 per cent year-over-year, reinforcing Reddit’s attractiveness to brands.

The company’s rising traffic has been a key factor in boosting its ad revenue. While Reddit’s fourth-quarter user growth fell short of Wall Street expectations, weekly active unique visitors increased by 42 per cent year-over-year to surpass 379 million. The platform’s average revenue per unique visitor rose to $4.21, marking a 23 per cent increase from the previous year.

Wong said that Google’s search results have contributed to this traffic growth. However, she emphasised that Reddit’s logged-in users, who have grown by 27 per cent year over year, remain “the bedrock of our business.”