Reddit recently had a successful IPO with prices soaring and outperforming expectations. Is it because we love random anonymous opinions from complete strangers or is there a deeper AI play here?
Reddit is the first social media company since Pinterest in 2019 to go public. It opened at $34 a share and closed at $50.44 a share after its first day of trading. Which is great because it means that the public values your useless online opinion – at least to a certain extent.
Since 2021, there haven’t been many successful IPO plays out there, yet in the same week, another technology company – Astera Labs also had a successful IPO.
Reddit, however, is very different. In the world of AI, training data is a goldmine for these artificial intelligence models – and Reddit has a host of content for these models to train on. So much so that Google signed a $60,000,000 deal per year to use its content for their models. I wouldn’t be surprised to see other companies such as YouTube make a lot of cold hard cash here as well.
So I think the answer is a little deeper here. The market might be changing, but you might also need a deeper AI play here to be truly successful.
Honestly, though, I am honestly more concerned about the future than anything else. If models are getting trained based on your opinion, the world is in deeper trouble than we thought 🙂