• According to a report by Bloomberg, Reddit has also sued three other companies for scraping data from its website without obtaining permission.
• Reddit stated in its complaint that these companies have been collecting data from the social media platform via Google Search results, with the aim of reselling it.
• The social media platform also stated that Perplexity has been buying the collected Reddit data from at least one of the other companies named in the complaint.

Reddit Inc. (RDDT) on Wednesday reportedly sued Perplexity AI Inc., accusing it of unlawfully scraping data from the social media platform to train its artificial intelligence-powered search engine.

According to a report by Bloomberg, Reddit has also sued three other companies for scraping data from its website without obtaining permission. The three companies are Oxylabs UAB, AWMProxy, and SerpApi.

Reddit shares were down more than 6% in Wednesday's afternoon trade. Retail sentiment on Stocktwits around the company trended in the 'bearish' territory at the time of writing.

Data Collected Via Google Search Results, Says Reddit

Reddit stated in its complaint that these companies have been collecting data from the social media platform via Google Search results, with the aim of reselling it, according to the report. The social media platform also stated that Perplexity has been buying the collected Reddit data from at least one of the other companies named in the complaint.

Reddit's Chief Legal Officer, Ben Lee, said that the pressure to obtain“quality human content” due to an arms race between AI companies has fueled an industrial-scale“data laundering economy,” according to the report.

“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

Reddit's Deals With OpenAI And Google

Reddit has struck deals with OpenAI and Alphabet Inc.'s Google to license data from its platform. Its partnership with OpenAI integrates Reddit's content on the AI startup's platform, while the latter gets access to AI-powered tools for its users and moderators.

However, Reddit has gone after other AI startups for unauthorized use of its content. The social media platform sued OpenAI rival Anthropic in June, stating that the AI startup used Reddit data to train its AI models, without obtaining permission from the company.

RDDT stock is up 18% year-to-date and 149% over the past 12 months.

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