Welcome to our long-awaited Wednesday Bites. It's been a while, so let's dive right in as we cover the recent deals between AI companies and content publishers.

More specifically, we’re going to talk about Reddit’s deal with Google.

Plus, we'll engage in a thought experiment to predict where these agreements might take us in the next 3-5 years.

Google and Reddit: A Hookup in 3 Acts

Reddit made a recent deal with Google's AI division, valued at $60 million per year. Here are some initial thoughts

1. Reddit's decision to partner with Google's AI wing shouldn't come as a shock. With its impending IPO, Reddit is keen on sending positive signals to both institutional and retail investors.

2. This deal echoes a familiar cycle. In the past, content publishers allowed Google to crawl their data, inadvertently sacrificing potential revenue as users consumed content without visiting publishers' sites directly. However, today's companies are more cautious and strategic in their partnerships.

3. So….just $60 million? That’s it? Potential Reddit investors might question the wisdom of such a deal, considering Reddit's unique value lies in its vibrant community and specialized knowledge, rather than relying solely on SEO and clicks.

As we explore these developments, it's clear that the landscape of AI-company partnerships is evolving rapidly, and the implications for content publishers are significant.

Thought Experiment: Are small publishers doomed?

Let's envision a shift in how we consume information online. Currently, when you search on Google, you're presented with links from various websites. But let's fast forward to a future where entities like OpenAI strike numerous deals akin to Axel Springer's or Reddit's recent agreement.

In this future scenario, imagine typing in a topic you wish to learn about. Instead of the traditional search results, you're presented with a curated summary of news articles, seamlessly aggregated without the source being immediately evident. These articles could be ranked based on OpenAI's algorithms, similar to Google's SEO practices today. For instance, a Business Insider article might be prioritized based on OpenAI's ranking.

This evolution in search dynamics shifts the focus to numbers and rankings on platforms like GPT. Content creators now strategize to ensure their content ranks high or to ensure their content is included in the AI's database, ultimately driving clicks and ad revenue.

Furthermore, as AI advancements continue, we may witness a further consolidation of news sources. With deep-pocketed players investing in AI and reduced overhead costs, there's a greater capacity for acquiring specialized publications. These acquisitions can then be streamlined and made more efficient, signaling a significant transformation in the media landscape.

What AI Made This Week

Sick Fits by Ahmed

Andrew Garfield. A severely underrated style king.

Have a great week!

Ahmed and Peter