👉 Background: Reddit is the social online forum that was launched back in 2005 and is known for its user-led communities - called subreddits. In August this year, Reddit became the 9th most-visited website in the world.

👉 What happened: Reddit’s share price has jumped a whopping 40% after it announced its first-ever profitable quarter, with total revenue jumping 68% to a casual $348 million USD. It brought in adjusted operating profits of $94 million USD compared to a $6.9 billion USD loss this time last year.

👉 What else: This is off the back of Reddit signing major deals with Google and OpenAI to train their models using its data. And while that’s a juicy revenue source for now, it’s a little tricky to see how it plays out long-term.

What's the key learning?

💡A trendy revenue source is only successful if it’s also sustainable.

💡Lately we’ve been seeing many media companies entering deals with AI companies: Think: The Financial Times, News Corp, TIME, Vox Media…and Reddit. And these deals are creating a new revenue stream for media companies who are desperate to reinvigorate their declining revenue.

💡AI companies need access to a variety of original content to train their products but when those products become good enough and accurate enough, they won’t might not need the source material anymore. And this could create an existential crisis for many media brands who are starting to rely on this new source of revenue.