Sam Altman Huge Stake in Reddit Revealed in IPO Filing – The Hollywood Reporter

The Reddit IPO appears set to move forward, with the tech platform filing its form S-1 with the Securities and Exchange Commission on Thursday.

The form lists a variety of new details about the site, including its financials, risk factors, and key business lines.

But it also includes new details on its ownership, which includes a sizable stake controlled by OpenAI CEO Sam Altman, who controls 8.7 percent of the company’s stock, including 4.5 percent of its Class A shares, and 9.3 percent of its Class B shares.

That makes Altman the third-largest shareholder in Reddit, behind only the Newhouse family’s Advance, which owns just over 30 percent of the company, and China’s Tencent, which owns 11 percent of the company. Both the Newhouse family and Tencent were previously known as major investors in Reddit. Altman was known to be an investor, but the size of his stake was not known.

Reddit reported total revenue of $804 million in 2023, of which the vast majority ($788.8 million) was advertising-based (it also reported a net loss of $90.8 million last year). However it also used its prospectus to tout the significance of artificial intelligence as a potential growth area for the company.

“Our 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,” the company writes in the S-1.

“Reddit is one of the internet’s largest corpuses of authentic and constantly updated human-generated experience,” Reddit CEO Steve Huffman added in a letter included in the filing. “Reddit data constantly grows and regenerates as users converse. As the world becomes increasingly data-driven, we offer solutions that are human- and experience-focused. We expect our data advantage and intellectual property to continue to be a key element in the training of future LLMs.”

While Altman is no longer on Reddit’s board, his focus on AI seems closely aligned to Reddit’s vision. The company said in a footnote that last month it inked a data licensing agreement valued at $203 million, of which just over $66 million will be received in 2024. News reports have pegged the partner as Google, which is using Reddit data to train its Gemini LLM.

According to the filing, Huffman’s total compensation in 2023 was $193.2 million, though that was almost all in the form of stock and option awards, which may or may not vest, depending on the company’s performance. His salary was just over $341,000.

The company said that once the IPO is completed, the Newhouse family will have two board seats, including current board member Bob Sauerberg, as well as Steven O. Newhouse.