The Thesis
Reddit is arguably the most undervalued asset in the AI age. While Google indexes "information," Reddit indexes "human experience."
As LLMs (Large Language Models) consume the internet, they are running out of high-quality, conversational human data. Reddit is the largest repository of such data on earth. The thesis is a pivot from a Social Media Ad Business to a Data Licensing Utility.
Product Deep Dive: The Data Firehose
1. The Data API (Licensing)
- The Product: Reddit sells access to its "Firehose" (real-time stream of all comments and posts).
- The Customer: OpenAI (ChatGPT), Google (Gemini), and Anthropic.
- The Dynamic: AI models cannot reason about human nuance without training on Reddit threads. It is the only place where people rigorously debate, troubleshoot, and confess intimately (e.g., r/legaladvice, r/relationship_advice).
- Contract Value: Google signed a $60M/year deal. This is 100% margin revenue.
2. User Economy (The Site)
- The Product: A network of 100,000+ communities (subreddits) moderated by volunteers.
- The Moat: 19 years of content. You cannot recreate r/AskHistorians overnight. The "Knowledge Graph" is virtually impossible to replicate.
3. Contextual Advertising
- The Product: Ads targeted not by who you are (demographics) but by what you are looking for (intent).
- The Value: An ad for a gaming laptop performs exceptionally well in r/pcgaming.