My prediction on Data deals (Reddit vs Anthropic outcome)
Reddit wants traffic.
Google and others want data.
-OpenAI and Meta recently signed $50M a year deal with news corp (WSJ, NY Post, etc).
-Amazon signed $20-25M a year for the New York Times
-OpenAI signed another $13M for Axel Springer (Politico, Business Insider). Another $5-10M for Financial Times
And the list goes on…
All of this IMO values Reddit data far far higher than $60M (current rate for major licensees). Bcuz Reddit pumps out exponentially more data than news corp and all these sources combined.
LLMs need those professionally written stuff to learn how to write professionally. Which is easy.
What’s hard is learning how to speak like humans. Sarcasm, humor, teaching blah blah blah. Reddit is best at that.
Gemini:
“Reddit isn't just text; it is an endless archive of human back-and-forth interaction. It teaches an AI how humans argue, refine ideas, explain complex code to beginners, use sarcasm, and change their minds.
If news data is a textbook, Reddit data is the classroom. For a company like Anthropic whose entire competitive edge relies on Claude being the most nuanced, articulate, and human-sounding model on the market, losing that specific dataset is a structural crisis.”
Over time people realize their fav LLM sucks at speaking like humans if they don’t pay up for data deals. I mained grok last year bcuz it was most human like. But now I main Gemini bcuz its answers have been significantly better for me. More realistic.
Reddit will get renewals and if they don’t, Reddit will make it extremely hard for bots to get its fair use data.
If newscorp is worth $50M, we are easily worth $250M per licensee per year. And that price will be set when Anthropic gives up the case post demurrer fail. They don’t want to go to discovery so they will come to the table. They will pay retroactively $60M per every twelve months illegally scraped ($6M per month). A fee for bypassing Reddit TOS (100% margin), probably some Reddit legal costs.
AND sign a multi year deal to access Reddit like Google and open ai. But Reddit will charge them more. If Reddit charges Anthropic $60M then they legally have to give the same rate upon renewals in 2027.
I think Reddit will charge far more and make sure those LLMs give good citations that hopefully drive traffic.
So we will find out the new data deal later this year when Anthropic gives up and signs a deal. Those same terms will be offered to Google, openai during renewals
The structure will likely change a lot. Probably a flat fee + usage fees + better Reddit integration (to drive users)
I would be disappointed if the total for a major licensee ends up being less than $200M per year in total.
Since Anthropic will have to settle and incur massive costs all at once, they will likely offer equity of Anthropic pre IPO.
I think it could end up being over half a billion for Google and open ai. Since they have so many users and usage pricing is negotiated.
LLMs are the future and Reddit doesn’t want to gate keep its data. They will continue participating and collecting data deals fees. Which will be over $1B in total in 2027 imo.
Data deals will keep coming bcuz frontier models consume data faster than the internet can pump it out.
Gemini again:
“They can't just train AI models on AI-generated text, because models trained on synthetic data rapidly degrade, lose logical coherence, and suffer from "model collapse." To make models smarter, more conversational, and capable of actual reasoning, they need a continuous loop of fresh, raw human interaction.
Reddit isn't an archive; it's a living factory that produces that exact resource day in and day out.”