What you need to know
- Last week, it was reported that Reddit was blocking Bing, but not because it had an exclusive deal with Google.
- Google’s deal with Reddit is reportedly worth $60 million, and as a result, it can use its AI tools on Reddit to enhance Google search results.
- Now, Reddit CEO Steve Huffman says Microsoft refuses to negotiate with them and that blocking Redmond has been a “real pain in the ass.”
- Ironically, OpenAI’s new SearchGPT does agree with Reddit and can show search results.
Another week and more drama between modern tech giants Microsoft and Reddit (and we’ll throw OpenAI and Google into the mix). Last week, it was reported that Microsoft’s Bing search engine is not surfacing AI-powered summaries (or, at least, not as much as it used to) because it did not reach a deal with Reddit to use the data.
However, while that is accurate, the original Reddit PR comment implied that there were negotiations between Microsoft (and AI search rivals Anthropic and Perplexity). The companies merely had not reached a deal, noting, “… We have been in discussions with multiple search engines. We have been unable to reach agreements with all of them, since some are unable or unwilling to make enforceable promises regarding their use of Reddit content, including their use for AI."
Now, Reddit’s CEO Steve Huffman is being blunter, claiming in a recent interview with The Verge that Microsoft refuses to negotiate with the massive online site, suggesting that it doesn’t want to pay a dime for the data.
That’s a very different spin from "unable to reach agreements".
Microsoft has not responded to The Verge about the claim so far, leaving some skepticism on the table until it does.
Moreover, Huffman says it’s “a real pain in the ass to block these companies” from scrapping its site for data to train its AI. For its part, Microsoft is respecting the robots.txt standard which blocks companies like Microsoft from scrapping Reddit’s data.
Where all of this goes remains to be seen.
If Microsoft wants to be taken seriously as a search engine, ignoring Reddit and giving users one more reason to use Google will seem counterintuitive to growing marketshare. On the other hand, once Microsoft reaches a deal with Reddit, it will likely have to deal with all digital publishers (including Future plc, owner of Windows Central), which is a great thing for publishers but bad for Microsoft’s bottom line since it is getting all the data for free.
Even Microsoft's big AI partner, OpenAI, is able to use Reddit's data as Huffman notes it reached a deal with the company earlier this year for its recently-unveiled SearchGPT engine.
Indeed, investors are getting a bit antsy with Microsoft’s heavy investment in AI but with little return. And companies like OpenAI are feeling a financial pinch as the cost of scaling outpaces the adoption of recurring revenue streams as consumers see little value. A recent study indicating that 30% of AI projects might be abandoned after proof of concept by 2025 also does not help the case.
So, will Microsoft end up paying? We'll have to wait and see.
