Reddit Sues AI Startup Anthropic Over Unauthorized Data Usage
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What's Going On With Reddit Shares Today? - Reddit (NYSE:RDDT)
Reddit Inc. RDDT shares are trading higher Wednesday after the company filed a lawsuit against artificial intelligence startup Anthropic, accusing it of unauthorized use of Reddit's data for AI model training. What To Know: According to the complaint filed in California, Reddit claims Anthropic accessed its site more than 100,000 times even after stating it had stopped scraping data. The lawsuit alleges Anthropic trained its AI models, including the recently released Claude Opus 4, using Reddit content without a license or user consent, despite Reddit having formal data licensing deals with OpenAI and Google, according to The Wall Street Journal. Reddit argues its data is particularly valuable due to the human-to-human conversational format across over 100,000 subreddits. The company says it previously attempted to reach a licensing agreement with Anthropic but those talks failed. Reddit also points to a 2021 Anthropic research paper that specifically cited Reddit data as useful for training AI systems. The stock's move reflects investor optimism that Reddit is taking steps to protect and monetize its data assets in the AI space. RDDT Price Action: Reddit shares closed Wednesday up 6.63% at $118.21, according to Benzinga Pro. Read Next: Stocks Stall On Weak Economic Data, Treasuries Eyes Best Rally In 7 Months: What's Driving Markets Wednesday? Image Via Shutterstock. RDDTReddit Inc$118.116.54%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum92.22GrowthNot AvailableQualityNot AvailableValue5.51Price TrendShortMediumLongOverview This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs
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Reddit stock rises following lawsuit against AI firm Anthropic By Investing.com
Investing.com -- Shares of Reddit Inc (NASDAQ:NYSE:RDDT) climbed 7.2% after the company filed a lawsuit against Anthropic, an AI lab startup and maker of the Claude line of models, for allegedly using Reddit's user data without authorization. The legal action accuses Anthropic of breach of contract and unlawful business practices, asserting that the AI firm accessed Reddit's site over 100,000 times even after claiming to have ceased such activities. The online platform, known for its user-generated content and discussions, alleges that Anthropic's unauthorized use of data not only violates Reddit's licensing terms but also causes harm to its business. This move to protect its data assets sets Reddit apart from its dealings with other tech giants like OpenAI and Google (NASDAQ:GOOGL), who have formal agreements with Reddit for data usage. Filed on Wednesday in a California court, the lawsuit details Reddit's claim that Anthropic has been commercially exploiting Reddit's data without compensation and in disregard of the platform's user data policy. The complaint emphasizes the contradiction between Anthropic's actions and its public image, highlighting the company's portrayal as the "white knight of the AI industry." Reddit is seeking damages and an injunction to enforce compliance with its data usage rules. The case represents a significant moment in the ongoing debate over the ethical use of data by AI companies and the importance of consent in training AI models. The market's positive reaction to Reddit's legal stance underscores investor confidence in the company's commitment to protecting its intellectual property and the value of its user data. Reddit's proactive approach to ensuring that its terms of data usage are respected may also provide reassurance to its users and partners about the platform's dedication to data privacy and security.
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Reddit files a lawsuit against AI startup Anthropic for allegedly using its data without authorization, leading to a rise in Reddit's stock price.
Reddit Takes Legal Action Against Anthropic
In a significant move that underscores the growing tensions between content platforms and AI companies, Reddit Inc. (NYSE:RDDT) has filed a lawsuit against artificial intelligence startup Anthropic. The legal action, initiated in a California court, accuses Anthropic of unauthorized use of Reddit's data for training its AI models, including the recently released Claude Opus 4 1.
Allegations of Unauthorized Data Access
Reddit's complaint alleges that Anthropic accessed its site more than 100,000 times, even after claiming to have ceased data scraping activities. This unauthorized access is said to have occurred without a license or user consent, contrasting with Reddit's formal data licensing agreements with other tech giants like OpenAI and Google 2.
Source: Benzinga
The lawsuit emphasizes the value of Reddit's data, particularly due to its human-to-human conversational format across over 100,000 subreddits. Reddit argues that this unique structure makes its content especially valuable for training AI systems, a point reportedly acknowledged by Anthropic in a 2021 research paper 1.
Legal Claims and Sought Remedies
Reddit's legal action accuses Anthropic of breach of contract and unlawful business practices. The company is seeking damages and an injunction to enforce compliance with its data usage rules. This move not only aims to protect Reddit's intellectual property but also to address the broader issue of ethical data use in AI development 2.
Market Response and Implications
The announcement of the lawsuit has had a positive impact on Reddit's stock price, with shares closing up 6.63% at $118.21 on Wednesday 1. This market response reflects investor optimism about Reddit's proactive stance in protecting and potentially monetizing its data assets in the AI space.
Broader Context and Industry Impact
This legal battle highlights the ongoing debate over the ethical use of data by AI companies and the importance of consent in training AI models. It also underscores the growing value of user-generated content in the development of advanced AI systems. Reddit's action may set a precedent for how content platforms protect their data and negotiate with AI companies in the future 2.
As the AI industry continues to evolve rapidly, this case could have far-reaching implications for data rights, AI training practices, and the relationships between content platforms and AI developers. It also raises questions about the balance between innovation in AI and the protection of intellectual property and user privacy.
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