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Following in the footsteps of Twitter’s recent decision to restrict third-party access to its data, Reddit has announced that it will begin charging for the use of its API. However, the policy change is not a blanket one. As reported, Reddit’s API will remain free for developers who want to build apps and bots that enhance users’ experience on Reddit, as well as for researchers who have strictly academic or non-commercial purposes.

The change comes as Reddit looks for ways to monetize its vast array of user-generated content, which has been increasingly used to train high-profile machine learning models such as OpenAI’s ChatGPT and GPT-4. With over 430 million monthly active users across more than 1.2 million special interest communities, with 138,000 being active, as of 2019, Reddit’s data is considered valuable, especially because it’s continuously updated.

“We think that’s fair,” said Reddit co-founder and CEO Steve Huffman. “It’s a good time for us to tighten things up.”

Huffman believes that Reddit’s data is particularly valuable due to the authentic conversations that take place on the platform, with users sharing content that they might only reveal in therapy, AA meetings, or never at all. He reiterated that Reddit doesn’t need to give away all of that value to some of the largest companies in the world for free.

While Reddit has not yet announced the details of its API pricing, the move could be motivated by the company’s potential initial public offering (IPO) later this year. Reddit was valued at around $10 billion in August 2021 and is estimated to have made $350 million from ads two years ago, which pales in comparison to the ad revenues of Meta and Twitter. Meta made $113 billion in 2022, while Twitter raked in nearly $7 billion, despite its controversies.

In addition to the API policy change, Reddit has also announced plans to incorporate more artificial intelligence (AI) into how the site operates. This includes identifying the use of AI-generated text on Reddit and adding a label to notify users that a comment might have come from a bot. Reddit also aims to improve its moderation tools and the third-party bots that assist moderators in monitoring the forums.

As Reddit looks to monetize its platform and prepare for its potential IPO, the implementation of API access fees marks a significant change in its business strategy. While developers building apps and bots to enhance users’ experience will continue to have free access to Reddit’s API, other companies that crawl Reddit for data without providing value to users will now have to pay for access. With the evolving landscape of social media and user-generated content, Reddit’s move to monetize its API may have broader implications for the industry as a whole.