by Nathan2055 | 2025-08-11 20:44:46+00:00
> What they're really afraid of is that people will read content using LLM inference and make all the ads and nags and "download the app for a crap experience" go away -- and never click on ads accidentally for an occasional ka-ching.

See, I don't think this is right either. Back during the original API protests, several people (including me!) pointed out that if the concern was really that third-party apps weren't contributing back to Reddit (which was a fair point: Apollo never showed ads of any kind, neither Reddit's or their own) then a good solution would be to make using third-party apps require paying for Reddit Premium. Then they wouldn't have to audit all of the apps to ensure they were displaying ads correctly and would be able to collect revenue outside of the inherent limitations of advertising.

Theoretically, this should have been a straight win for Reddit, especially given the incredibly low income that they've apparently been getting from ads anyway (I can't find the report now so the numbers might not be exact, but I remember it being reported that Reddit was pulling in something like ~$0.60 per user per month versus Twitter's slightly better ~$8 per user per month and Meta's frankly mindblowing ~$50 per user per month) but it was immediately dismissed out of hand in favor of their way more complicated proposal that app developers audit their own usage and then pay Reddit back.

My initial thoughts were either that the Reddit API was so broken that they couldn't figure out how to properly implement the rate limits or payment gating needed for the other strategy (even now the API still doesn't have proper rate limits, they just commence legal action anyone they find abusing it rather than figure out how to lock them out; the best they can really do is the sort of basic IP bans they're using here), or the Reddit higher-ups were so frustrated that Apollo had worked out a profitable business model before them that they just wanted to deploy a strategy targeted specifically at punishing them.

But it quickly became clear later that Reddit genuinely wasn't even thinking about third-party apps. They saw dollar signs from the AI boom, and realized that Reddit was one of the largest and most accessibly corpuses of generally-high-quality text on a wide variety of topics, and AI companies were going to need that. Google showing an intense dependency on Reddit during the blackout didn't hurt either (yes, at this point I genuinely believe the blackout actually hurt more than it helped by giving Reddit further leverage to use on Google, hence why they were one of the first to sign a crawler deal afterwards).

So they decided to use any method they could think of to lock down access to the platform while keeping enough people around that the Reddit platform was still mostly decent enough to be usable for AI training and pivoted much of their business to selling data. All of this while claiming, as they're still doing today with the Internet Archive move, that this is somehow a "privacy measure" meant to ensure deleted comments aren't being archived anywhere.

The same thing basically happened with Stack Exchange, except they had much less leverage over their community because the entire site was previously CC licensed and they didn't have any real authority to override that beyond making data access really annoying.

The good news is that it really does seem like "injest everything" big model AI is the least likely to survive at this point. Between ChatGPT scaling things down massively to save on costs with the GPT-5 update and the Chinese models somehow making do with less data and slower chips by just using better engineering techniques, I highly doubt these economics around AI are going to last. The bad news is that, between stuff like this and the GitHub restructuring today, I don't thing Big Tech has any plans on how they're going to continue functioning in an economy that isn't entirely based on AI hype. And that's really concerning.