Reddit Advances Legal Action Against Perplexity AI and Others
- In a recent announcement, Reddit has filed a lawsuit against Perplexity AI Inc., alleging illicit data scraping activities aimed at training its AI-driven search engine.
- The lawsuit, reported by Bloomberg, extends to three additional firms accused of similar practices, specifically Oxylabs UAB, AWMProxy, and SerpApi.
- According to the complaint, these entities have been extracting data from Reddit through Google Search results for subsequent resale.
On Wednesday, Reddit Inc. (RDDT) took significant legal measures by suing Perplexity AI Inc. for allegedly scraping data from its platform without consent, a practice the company deems unlawful.
Bloomberg’s report further outlines that Reddit has also initiated legal proceedings against three other companies—Oxylabs UAB, AWMProxy, and SerpApi—all implicated in unauthorized data collection activities.
Following these developments, Reddit’s stock experienced a decline of over 6% during Wednesday afternoon trading sessions, with retail sentiment on Stocktwits leaning toward a ‘bearish’ outlook.
Claims of Data Acquisition Via Google Search
Reddit’s formal complaint asserts that these firms collected data from the platform through Google Search results, ostensibly for the purpose of resale. The lawsuit also indicates that Perplexity has been acquiring this data from at least one of the implicated companies.
Ben Lee, Reddit’s Chief Legal Officer, commented on the situation, suggesting that an escalating demand for “quality human content” amid competition among AI companies has precipitated the emergence of a large-scale “data laundering economy.”
“Reddit is a prime target because it’s one of the largest and most dynamic collections of human conversation ever created.”
— Ben Lee, Chief Legal Officer, Reddit
Partnership Agreements with OpenAI and Google
In contrast to the current legal confrontations, Reddit has established partnerships with OpenAI and Alphabet Inc.’s Google to license its data. This collaboration allows for the integration of Reddit’s content into OpenAI’s offerings, thus providing enhanced access to AI-driven tools for end-users and moderators alike.
Despite these agreements, Reddit has pursued legal action against other AI startups that have allegedly misused its content, having previously sued Anthropic in June for unauthorized data utilization in training their AI models.
As of now, RDDT shares have reflected a year-to-date increase of 18% and an impressive 149% over the preceding 12 months.
Source link: Stocktwits.com.
