Reddit: Fake Users, Unpaid Moderators, and the Sale of Its Data to AI

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Reddit exists because Paul Graham turned down an app for ordering food by text message. In the spring of 2005, University of Virginia roommates Steve Huffman and Alexis Ohanian pitched him My Mobile Menu after a lecture in Boston. He passed on the idea but invited them into the first class of Y Combinator with a new brief: build the front page of the internet. The site launched that June to an empty room, so the founders created hundreds of fake accounts and held conversations with themselves.

This episode follows Reddit from that manufactured crowd to a March 2024 IPO that raised $600 million. Along the way: Aaron Swartz's rewrite of the code in Python, a 2006 sale to Conde Nast, a run of chief executives that included one who quit over an office move, and Ellen Pao's contested anti-harassment rules. Beneath it all sits a volunteer workforce of moderators, whose 2023 revolt over API fees turned out to be collateral damage in a fight over who pays for AI training data.

• Aaron Swartz moved Reddit from Huffman's original Common Lisp to Python using his own web.py framework. He was fired in January 2007 after blogging about corporate life at Conde Nast.
• Under CEO Yishan Wong the user base grew from 35 million to 174 million. He resigned in 2014 after a dispute over moving the headquarters to Daly City.
• Researchers estimate that moderators perform about 466 hours of unpaid work every day, worth roughly $3.4 million a year.
• During the June 2023 blackout over API pricing that killed the Apollo app, some large subreddits allowed only pictures of John Oliver, and others marked themselves NSFW to cut off ad revenue.
• In 2024 Reddit signed a licensing deal with Google worth roughly $60 million a year, followed by one with OpenAI. Such deals now make up nearly 10 percent of revenue.