Reddit sues AI startup Anthropic for breach of contract, ‘unfair festival’

Reddit is suing artificial intelligence startup Anthropic for what it is calling a breach of contract and for enticing in “unlawful and unfair business acts” via the use of the social media corporate’s platform and knowledge with out authority.

The lawsuit, filed in San Francisco on Wednesday, claims that Anthropic has been coaching its fashions at the private knowledge of Reddit customers with out acquiring their consent. Reddit alleges that it’s been harmed via the unauthorized industrial use of its content material.

Reddit stocks spiked greater than 7% on Wednesday, hitting their prime for the day after the lawsuit used to be made public.

The corporate opens the criticism via calling Anthropic a “late-blooming” AI corporate that “bills itself as the white knight of the AI industry.” Reddit follows via pronouncing, “It is anything but.”

“For its part, despite what its marketing material says, Anthropic does not care about Reddit’s rules or users: it believes it is entitled to take whatever content it wants and use that content however it desires,
with impunity,” the submitting mentioned.

Anthropic didn’t right away reply to CNBC’s request for remark.

Since the generative AI increase started with the release of OpenAI’s ChatGPT in past due 2022, Reddit has been at the leading edge of the dialog. Its 20-year-old website is stuffed with user-generated details about loads of 1000’s of subjects and has been a primary supply of coaching for enormous AI fashions, together with Anthropic’s Claude.

Reddit introduced a partnership with OpenAI in May that can permit the corporate to coach its AI fashions on Reddit content material. The corporate has a equivalent settlement with Google.

In the lawsuit, Reddit mentioned that “other giants in the AI space understand a respect Reddit’s rules,” which is why it has entered into formal partnerships with firms like OpenAI and Google. OpenAI CEO Sam Altman is a former board member and main shareholder in Reddit, with a stake now valued at smartly over $1 billion.

In March, Anthropic used to be valued at $61.5 billion in a investment spherical led via Lightspeed Venture Partners, and together with participation from Salesforce Ventures and Cisco Investments. The corporate, based in 2021 via ex-OpenAI executives, has been sponsored closely via Amazon.

Reddit held its IPO in 2024 and is now valued at about $22 billion.

It has established laws dictating how its knowledge can be utilized, which the corporate says within the submitting “are clearly memorialized” within the Reddit’s consumer settlement.

“While Reddit has always been of the mind that the community should be open to all humans looking for connection and community, it has never allowed its platform and the countless communities who find a home on it to be appropriated by commercial actors seeking to create billion-dollar enterprises and offering nothing in return to Reddit and its users,” the criticism says.

Reddit mentioned the purpose of the lawsuit is to hunt damages and compel Anthropic to abide via its contractual and prison tasks.

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WATCH: Reddit sues Anthropic alleging wrongful use of content material