Steve Huffman, cofounder and CEO of Reddit (Frederic J. Brown/Getty Images)

Weird Money

Reddit is now crushing it thanks to AI

The social network’s revenue and user numbers are soaring.

11/1/24 12:58PM

When Reddit filed to go public in early 2024, I thought its valuation seemed steep. According to Reddit’s S-1, the company had made $804 million in revenue in 2023, up ~20% from the year before, but it had a $90 million net loss, and it had never been profitable. Its $9.5 billion market cap at the end of its first trading day felt high.

Additionally, while the S-1 mentioned “artificial intelligence” and “AI” 63 times, it wasn’t clear how artificial intelligence would generate higher revenues or user growth. The company claimed that its content is “particularly important for artificial intelligence (‘AI’) — it is a foundational part of how many of the leading large language models (‘LLMs’) have been trained,” and it planned to “drive growth in advertising revenue by focusing on initiatives to support advertising improvements, including increased use of artificial intelligence in our advertising solutions,” but every company has been claiming that AI would be transformative for their businesses, despite actual results being mixed.

After Reddit’s earnings report earlier this week, I take back any of my concerns from earlier this year. After reporting a killer quarter on Tuesday, Reddit’s stock jumped as high as 48% on Wednesday, reaching $121 per share after ending Tuesday at ~$82.

Some highlights from the earnings report:

Daily Active Uniques climbed by 47% year over year to 97.2 million
Revenue increased by 68% to $348.4 million
Achieved first-ever GAAP profitability with $29.9 million in net income

One of the key drivers of Reddit’s recent success? AI, specifically with translation tools. From Reddit’s Q3 shareholder letter:

“This year, we started using AI to translate Reddit’s corpus into other languages, making it more accessible for non-English speakers to enjoy in their native languages. After promising results with French in the first half of this year, we expanded our coverage to include Spanish, Portuguese, Italian, and German. This quarter, machine translation drove four times more users than last quarter, and based on the success we’ve seen so far, we plan to expand machine translation to over 30 countries through 2025. As Reddit becomes a truly global platform, we are focused on ensuring everyone, regardless of their language, can participate in and benefit from the communities on Reddit.”

Reddit’s AI translation tools have made the platform more language agnostic, as users from different markets can now read more content, leading to an explosion in user growth. Interestingly, the AI boom seems to have created a tailwind for Reddit discoverability through Google Search as well:

“Reddit’s influence continues to grow across the broader internet. In 2024 so far, ‘Reddit’ was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice, or community, they’re turning to Reddit.”

My hypothesis here is that the recent proliferation of AI content that we’ve seen has led internet users to seek out “real” content written by other humans. It’s a well-known meme at this point that we have all found the answer to some super-niche, ultra-specific question in a Reddit post from years ago, but the recent proliferation of AI content has made Reddit even more valuable.

An increasing amount of content on social media, and the internet in general, is AI-generated, SEO-optimized slop, but Reddit’s structure — different topic-based subreddits governed by moderators — has helped it prioritize human-created content. Additionally, people can more easily find answers and expertise on specific topics in different subreddits, while Google Search is hit-or-miss and generative-AI tools like ChatGPT are still prone to hallucinations.

Reddit is experiencing an incredible AI flywheel: distrust in AI content is causing internet users to add “Reddit” to their Google Searches to get real answers, and the company is leveraging its own AI tools to make its content more accessible. With its market cap now double its $9.5 billion valuation after its IPO, Reddit has proven to be one of the more successful “AI” stories so far.

Max Knoblauch6/15/26

Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

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JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

Max Knoblauch6/8/26

Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”

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