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Reddit stock rises following lawsuit against AI firm Anthropic

Published 04/06/2025, 20:10
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RDDT
17.47%

Investing.com -- Shares of Reddit Inc (NASDAQ:NYSE:RDDT) climbed 7.2% after the company filed a lawsuit against Anthropic, an AI lab startup and maker of the Claude line of models, for allegedly using Reddit’s user data without authorization. The legal action accuses Anthropic of breach of contract and unlawful business practices, asserting that the AI firm accessed Reddit’s site over 100,000 times even after claiming to have ceased such activities.

The online platform, known for its user-generated content and discussions, alleges that Anthropic’s unauthorized use of data not only violates Reddit’s licensing terms but also causes harm to its business. This move to protect its data assets sets Reddit apart from its dealings with other tech giants like OpenAI and Google (NASDAQ:GOOGL), who have formal agreements with Reddit for data usage.

Filed on Wednesday in a California court, the lawsuit details Reddit’s claim that Anthropic has been commercially exploiting Reddit’s data without compensation and in disregard of the platform’s user data policy. The complaint emphasizes the contradiction between Anthropic’s actions and its public image, highlighting the company’s portrayal as the "white knight of the AI industry."

Reddit is seeking damages and an injunction to enforce compliance with its data usage rules. The case represents a significant moment in the ongoing debate over the ethical use of data by AI companies and the importance of consent in training AI models.

The market’s positive reaction to Reddit’s legal stance underscores investor confidence in the company’s commitment to protecting its intellectual property and the value of its user data. Reddit’s proactive approach to ensuring that its terms of data usage are respected may also provide reassurance to its users and partners about the platform’s dedication to data privacy and security.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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