We need more 'platforms' like Reddit to stop AI turning humans into robots

While the world is moving towards a more AI-generated society—which is fantastic, as we can generate email responses much faster or produce content in an instant—are we going to become so reliant on AI that we become more AI than human?

My understanding is that AI training models learn from the internet, or rather, from what we have fed and are continuing to feed into it. AI is essentially learning from itself, a phenomenon otherwise known as "AI inbreeding" or "model collapse.”

But have we considered that the internet is becoming less human and more AI-driven as people flood it with synthetic content?

Understanding Model Collapse

The best way to explain AI inbreeding or model collapse is the "photocopy of a photocopy" effect. Have you ever photocopied a photocopy multiple times? The text and images eventually become blurry and unrecognisable.

Although AI can correct itself, it still makes micro-mistakes. When these mistakes build up over time, they create a much bigger problem. This is similar to the micro-tears I experience in my hamstrings from running; I can often feel that a bigger injury is just around the corner. So, as mistakes accumulate, the output AI spits out becomes worse with every new generation of models released.

As AI-generated content grows at a rapid rate, it makes me wonder: will AI slowly lose touch with humanity and reality? Will the information we source from it eventually make absolutely no sense and be completely wrong? Or will this trend shape how I write, causing me to become more like a robot the more I use it?

To prevent model collapse from happening, one solution is incorporating human input, feedback and opinions into the training set. This helps validate the data and ensures a more balanced learning model, rather than an AI repeatedly learning from its own generated content.

Will AI Change how Open Forums Operate?

This brings me to my next point: could a platform like Reddit (NYSE: RDDT), the ultimate open opinion forum, become an extremely important piece in this puzzle? Is Reddit the best place to ensure AI maintains the right balance between human interaction and artificial interaction?

You might already know of Reddit or have stumbled upon it while trying to see if anyone else shared a problem you had and if a solution existed.

You might also wonder: can't Reddit be flooded with AI-generated content too, which would defeat the purpose of fighting model collapse? You would be correct, but Reddit does have moderators and a dedicated community to call out this type of behaviour.

The platform also utilises tools to stop bots from opening accounts and spamming posts to rig the system. For instance, a new Reddit user cannot post without building up enough "karma," which requires upvotes from the community.

The Reddit-Google Licensing Agreement

Reddit signed a licensing agreement with Google in 2024 to feed data into Google’s AI models. The deal is reportedly worth USD $67 million per year and spans roughly two to three years, as reported in The Economic Times.

Recent articles suggest that Reddit is in early talks to renegotiate this deal with Google, which could mean higher licensing revenue or potentially an environment that maintains the balance between human and AI interaction. According to a Bank of America research note, these renewal deals are not expected until the fourth quarter 2026 at the earliest.

Have you noticed that when you Google something now, Reddit posts seem to be creeping higher up the search results? Maybe it’s just my own confirmation bias talking because I am actively researching Reddit at the moment, but surely it shouldn't be this high up naturally?

Breaking Down Reddit’s Revenue

Reddit generates 95% of its revenue through advertising, while the remaining 5% comes from data-licensing agreements with Google and OpenAI. Goldman Sachs research shows that this licensing revenue is projected to remain relatively flat through to 2030, which I find quite surprising considering the sheer importance of Reddit in the face of AI inbreeding.

Obviously, an increase in data-licensing revenue is preferred by the markets, as it is not reliant on cyclical ad revenue.

However, given the vital importance of supporting a world where human interaction coexists with AI, this is a positive sign for Reddit. Google will likely help Reddit maintain this ecosystem to prevent AI from cannibalising its data, avoiding the structural degradation mentioned above. I believe this dynamic will drive more eyes to Reddit, subsequently boosting ad revenue and granting them more negotiating power toward a larger, more lucrative licensing agreement.

Although recent news suggests otherwise but Reddit could be playing hardball with its new deal with Google, personally, I think these are standard negotiation tactics. The question is, who needs whom more? It looks like Reddit needs Google more, but it’ll be interesting to see how this plays out. If there is a favourable deal for Reddit, it may set a precedent for the importance of these platforms.

The share price is up 36.76% over the last twelve months and up 330% since its IPO in 2024.

Is it expensive? If you compare it to its current expected earnings per share of $4.62, the current P/E ratio sits at 37x (based on a share price of $170). Yet, with its current growth trajectory and recent quarterly results showing a 69% year-on-year growth rate, the valuation isn't entirely outrageous considering the market is expecting 20-30% revenue growth.

This is especially true if their revenue continues to grow at a strong pace, potentially boosted by newly negotiated agreements with AI training providers or by Google prioritising their threads in search results to preserve the human interaction needed to sustain AI models.

Is Reddit the Solution to Model Collapse?

I will be watching the new terms of Reddit’s AI licensing agreements with keen interest. It highlights just how important platforms like Reddit are in combating this problem. At the end of the day, this $39 billion business might be sitting on a data goldmine that is crucial to stopping AI from eating itself.

If we don’t have these kinds of platforms, I know for a fact I don’t want to be Leonardo DiCaprio in the 2010 movie 'Inception', where I must spin a metal top to confirm whether it's reality, a dream, or in this case, AI.