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Reddit, home to cute cat pictures, investment advice, niche hobby discussions, celebrity interviews, edgy memes, wholesome memes and everything in between, has been facilitating discussions on the internet since 2005. The site has about 57 million daily active users who post and consume news, memes, questions and even stock tips that can roil markets.

The company filed for an initial public offering at the end of 2021. As it prepares to go public, it’s looking to turn a profit for the first time. The company is charging for access to its application programming interface, or API. The price hikes have led some beloved third-party Reddit apps such as Apollo to shut down, instigating an uproar among the website’s community of volunteer moderators, who often rely on third-party apps to run the site’s 100,000+ discussion communities, called subreddits.

Despite extensive protests in which thousands of moderators took their communities private, the API pricing changes took effect July 1 as planned. Under pressure from Reddit admins, nearly all communities have reopened. But tensions remain high, and some say that if Reddit doesn’t rebuild trust, its most passionate users will go elsewhere.

“Reddit is nothing without those communities. They need us far more than we need them,” said David DeWald, a moderator of the r/Arcade1up subreddit and a community manager for the telecommunications company Ciena.

The rise of Reddit

When Reddit co-founders Alexis Ohanian and Steve Huffman were in their senior year at the University of Virginia, startup accelerator Y Combinator was just getting off the ground. The two had met founder Paul Graham at a talk, and he suggested that the recent graduates build what he called “the front page of the Internet.” Ohanian and Huffman jumped at the chance. Y Combinator invested just $12,000 in 2005, and Reddit officially became a part of its first batch of companies.

“For the first probably like month, month and a half, a good number of the folks posting were just me and Steve under usernames that we just invented from like objects in the room, just random stuff just so that it would look like there was some activity,” Ohanian said.

Reddit founders Alexis Ohanian (L) and Steve Huffman (R)

Reddit

But real user activity picked up, and just 16 months after its founding, Reddit was acquired for $10 million by Condé Nast. By 2010, co-founders Ohanian and Huffman were no longer involved in day-to-day operations, but traffic was booming. In 2011, Reddit was spun out as an independent company, operating as a subsidiary of Condé Nast’s owner, Advance Publications.

“I think it was fashionable back then to want to just grow and Facebook had proven out so well that if you focus on growth and then have a critical mass of users, you could make money,” Ohanian said.

On the one hand, Reddit’s niche communities were ideal places for target advertising, but the company’s permissive attitude toward questionable content also posed a problem.

“Reddit is kind of a perfect environment for advertising because the communities can get so specific and so passionate about whatever it is that they’re discussing,” said Debra Aho Williamson, principal analyst at Insider Intelligence. “But Reddit has had challenges over the years with hate speech and other things that are maybe not brand-friendly.”

Ohanian rejoined Reddit as executive chairman in 2014 and Huffman rejoined as CEO the next year. This time around, Ohanian said, he wanted to reign in some of the site’s more toxic subcultures. In 2015, a new anti-harassment policy led to the banning of some hateful communities, but certainly not all.

Then, in the wake of George Floyd’s murder in 2020, Ohanian resigned from the company’s board, urging Reddit to replace him with a Black candidate, which the company honored.

“I hoped that Reddit would finally get a hate policy so that we could ban those thousands of hate communities that were up, which happened, you know, a few weeks after I resigned,” Ohanian said. Reddit ultimately banned about 2,000 subreddits, including r/The_Donald, r/ChapoTrapHouse and r/gendercritical.

With the world stuck inside during the Covid-19 pandemic, engagement shot up. In the beginning of 2021, Reddit made headlines when users in the subreddit r/wallstreetbets organized a short squeeze on GameStop, the struggling video game retailer. Subsequent so-called “meme stocks” such as AMC kept Reddit in the news for months. Advertising was booming when the company filed for an IPO at the end of the year.

API pricing changes

Now, Reddit wants to turn a profit. With companies such as OpenAI and Google scraping the internet to train large language models, Reddit wants them to pay for its data. Huffman announced in April that Reddit would start charging for access to its API, the gateway through which companies can download all of Reddit’s user-generated content.

But it’s not just tech giants who use Reddit’s API. Many popular third-party mobile apps and moderator tools also rely on API access, which was previously free. These third-party apps are largely just alternatives to Reddit’s official mobile app, which didn’t even exist until 2016. But when developers learned about the new pricing structure at the end of May, many realized they couldn’t afford it. 

“Most companies, whenever they have significant API changes, you know, they give anywhere from like three to sometimes like 15 months for developers to acclimate to these big changes,” said Dac Croach, a moderator of the r/Gaming subreddit, now the third-largest community on the site. “And with Reddit kind of coming out of the gate and saying, you know, you have 30 days to figure this out […] I mean, that is an impossible task for many of those third-party developers.”

The developer of Apollo said it would cost him over $20 million per year to operate given the new pricing structure. Apollo shut down, along with other popular third-party apps such as rif is fun, Reddplanet and Sync, a blow to their loyal users who said they have sleeker user interfaces and more features than the official Reddit app.

Jakub Porzycki | Getty Images

The pricing changes caused a particular uproar in a subreddit for blind users, who relied upon many of the third-party apps’ accessibility features. Blind moderators claim it’s very difficult to moderate on mobile using Reddit’s app, something Reddit says it’s currently working to improve.

In total, over 8,000 subreddits participated in a sitewide blackout from June 12 to June 14 to protest the changes. Many communities stayed closed much longer, while others labeled themselves “Not safe for work,” automatically making them ineligible spaces for advertising. 

While most communities have returned to business as usual, there are some notable exceptions. For example, the r/pics and r/gifs subreddits are now limited to featuring pics and gifs of comedian John Oliver. The moderators of the popular Ask Me Anything subreddit said they will no longer organize interviews with celebrities and other high-profile figures, which has long been a major driver of engagement.

“They’re not burning things down. They’re saying, hey, you know, you didn’t listen to me then, can you listen to me now?” said Croach.

Reddit is rolling out several new moderator tools for its native app, but the company’s overall response has left many moderators frustrated. In an interview with NBC News, Huffman compared moderators with “landed gentry,” saying that the control they have over the communities they moderate is undemocratic.

Now, as Reddit marches toward an IPO, the tech world is watching to see how these tensions play out.

“Everyone in this situation is passionate for the success of Reddit. Reddit needs to realize that passion is what’s driving all of this anger,” said DeWald of the r/Arcade1up subreddit. “They need to work with us and work with other moderators and work with the app developers to find a solution that’s better for everyone, including Reddit, because Reddit needs us to be there.”

Watch the video to learn more about the rise of Reddit, and how the recent protests could shape the company’s future.

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How Elon Musk’s plan to slash government agencies and regulation may benefit his empire

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How Elon Musk’s plan to slash government agencies and regulation may benefit his empire

Elon Musk’s business empire is sprawling. It includes electric vehicle maker Tesla, social media company X, artificial intelligence startup xAI, computer interface company Neuralink, tunneling venture Boring Company and aerospace firm SpaceX. 

Some of his ventures already benefit tremendously from federal contracts. SpaceX has received more than $19 billion from contracts with the federal government, according to research from FedScout. Under a second Trump presidency, more lucrative contracts could come its way. SpaceX is on track to take in billions of dollars annually from prime contracts with the federal government for years to come, according to FedScout CEO Geoff Orazem.

Musk, who has frequently blamed the government for stifling innovation, could also push for less regulation of his businesses. Earlier this month, Musk and former Republican presidential candidate Vivek Ramaswamy were tapped by Trump to lead a government efficiency group called the Department of Government Efficiency, or DOGE.

In a recent commentary piece in the Wall Street Journal, Musk and Ramaswamy wrote that DOGE will “pursue three major kinds of reform: regulatory rescissions, administrative reductions and cost savings.” They went on to say that many existing federal regulations were never passed by Congress and should therefore be nullified, which President-elect Trump could accomplish through executive action. Musk and Ramaswamy also championed the large-scale auditing of agencies, calling out the Pentagon for failing its seventh consecutive audit. 

“The number one way Elon Musk and his companies would benefit from a Trump administration is through deregulation and defanging, you know, giving fewer resources to federal agencies tasked with oversight of him and his businesses,” says CNBC technology reporter Lora Kolodny.

To learn how else Elon Musk and his companies may benefit from having the ear of the president-elect watch the video.

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Why X’s new terms of service are driving some users to leave Elon Musk’s platform

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Why X's new terms of service are driving some users to leave Elon Musk's platform

Elon Musk attends the America First Policy Institute gala at Mar-A-Lago in Palm Beach, Florida, Nov. 14, 2024.

Carlos Barria | Reuters

X’s new terms of service, which took effect Nov. 15, are driving some users off Elon Musk’s microblogging platform. 

The new terms include expansive permissions requiring users to allow the company to use their data to train X’s artificial intelligence models while also making users liable for as much as $15,000 in damages if they use the platform too much. 

The terms are prompting some longtime users of the service, both celebrities and everyday people, to post that they are taking their content to other platforms. 

“With the recent and upcoming changes to the terms of service — and the return of volatile figures — I find myself at a crossroads, facing a direction I can no longer fully support,” actress Gabrielle Union posted on X the same day the new terms took effect, while announcing she would be leaving the platform.

“I’m going to start winding down my Twitter account,” a user with the handle @mplsFietser said in a post. “The changes to the terms of service are the final nail in the coffin for me.”

It’s unclear just how many users have left X due specifically to the company’s new terms of service, but since the start of November, many social media users have flocked to Bluesky, a microblogging startup whose origins stem from Twitter, the former name for X. Some users with new Bluesky accounts have posted that they moved to the service due to Musk and his support for President-elect Donald Trump.

Bluesky’s U.S. mobile app downloads have skyrocketed 651% since the start of November, according to estimates from Sensor Tower. In the same period, X and Meta’s Threads are up 20% and 42%, respectively. 

X and Threads have much larger monthly user bases. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates X had 318 million monthly users as of October. That same month, Meta said Threads had nearly 275 million monthly users. Bluesky told CNBC on Thursday it had reached 21 million total users this week.

Here are some of the noteworthy changes in X’s new service terms and how they compare with those of rivals Bluesky and Threads.

Artificial intelligence training

X has come under heightened scrutiny because of its new terms, which say that any content on the service can be used royalty-free to train the company’s artificial intelligence large language models, including its Grok chatbot.

“You agree that this license includes the right for us to (i) provide, promote, and improve the Services, including, for example, for use with and training of our machine learning and artificial intelligence models, whether generative or another type,” X’s terms say.

Additionally, any “user interactions, inputs and results” shared with Grok can be used for what it calls “training and fine-tuning purposes,” according to the Grok section of the X app and website. This specific function, though, can be turned off manually. 

X’s terms do not specify whether users’ private messages can be used to train its AI models, and the company did not respond to a request for comment.

“You should only provide Content that you are comfortable sharing with others,” read a portion of X’s terms of service agreement.

Though X’s new terms may be expansive, Meta’s policies aren’t that different. 

The maker of Threads uses “information shared on Meta’s Products and services” to get its training data, according to the company’s Privacy Center. This includes “posts or photos and their captions.” There is also no direct way for users outside of the European Union to opt out of Meta’s AI training. Meta keeps training data “for as long as we need it on a case-by-case basis to ensure an AI model is operating appropriately, safely and efficiently,” according to its Privacy Center. 

Under Meta’s policy, private messages with friends or family aren’t used to train AI unless one of the users in a chat chooses to share it with the models, which can include Meta AI and AI Studio.

Bluesky, which has seen a user growth surge since Election Day, doesn’t do any generative AI training. 

“We do not use any of your content to train generative AI, and have no intention of doing so,” Bluesky said in a post on its platform Friday, confirming the same to CNBC as well.

Liquidated damages

Bluesky CEO: Our platform is 'radically different' from anything else in social media

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The Pentagon’s battle inside the U.S. for control of a new Cyber Force

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The Pentagon's battle inside the U.S. for control of a new Cyber Force

A recent Chinese cyber-espionage attack inside the nation’s major telecom networks that may have reached as high as the communications of President-elect Donald Trump and Vice President-elect J.D. Vance was designated this week by one U.S. senator as “far and away the most serious telecom hack in our history.”

The U.S. has yet to figure out the full scope of what China accomplished, and whether or not its spies are still inside U.S. communication networks.

“The barn door is still wide open, or mostly open,” Senator Mark Warner of Virginia and chairman of the Senate Intelligence Committee told the New York Times on Thursday.

The revelations highlight the rising cyberthreats tied to geopolitics and nation-state actor rivals of the U.S., but inside the federal government, there’s disagreement on how to fight back, with some advocates calling for the creation of an independent federal U.S. Cyber Force. In September, the Department of Defense formally appealed to Congress, urging lawmakers to reject that approach.

Among one of the most prominent voices advocating for the new branch is the Foundation for Defense of Democracies, a national security think tank, but the issue extends far beyond any single group. In June, defense committees in both the House and Senate approved measures calling for independent evaluations of the feasibility to create a separate cyber branch, as part of the annual defense policy deliberations.

Drawing on insights from more than 75 active-duty and retired military officers experienced in cyber operations, the FDD’s 40-page report highlights what it says are chronic structural issues within the U.S. Cyber Command (CYBERCOM), including fragmented recruitment and training practices across the Army, Navy, Air Force, and Marines.

“America’s cyber force generation system is clearly broken,” the FDD wrote, citing comments made in 2023 by then-leader of U.S. Cyber Command, Army General Paul Nakasone, who took over the role in 2018 and described current U.S. military cyber organization as unsustainable: “All options are on the table, except the status quo,” Nakasone had said.

Concern with Congress and a changing White House

The FDD analysis points to “deep concerns” that have existed within Congress for a decade — among members of both parties — about the military being able to staff up to successfully defend cyberspace. Talent shortages, inconsistent training, and misaligned missions, are undermining CYBERCOM’s capacity to respond effectively to complex cyber threats, it says. Creating a dedicated branch, proponents argue, would better position the U.S. in cyberspace. The Pentagon, however, warns that such a move could disrupt coordination, increase fragmentation, and ultimately weaken U.S. cyber readiness.

As the Pentagon doubles down on its resistance to establishment of a separate U.S. Cyber Force, the incoming Trump administration could play a significant role in shaping whether America leans toward a centralized cyber strategy or reinforces the current integrated framework that emphasizes cross-branch coordination.

Known for his assertive national security measures, Trump’s 2018 National Cyber Strategy emphasized embedding cyber capabilities across all elements of national power and focusing on cross-departmental coordination and public-private partnerships rather than creating a standalone cyber entity. At that time, the Trump’s administration emphasized centralizing civilian cybersecurity efforts under the Department of Homeland Security while tasking the Department of Defense with addressing more complex, defense-specific cyber threats. Trump’s pick for Secretary of Homeland Security, South Dakota Governor Kristi Noem, has talked up her, and her state’s, focus on cybersecurity.

Former Trump officials believe that a second Trump administration will take an aggressive stance on national security, fill gaps at the Energy Department, and reduce regulatory burdens on the private sector. They anticipate a stronger focus on offensive cyber operations, tailored threat vulnerability protection, and greater coordination between state and local governments. Changes will be coming at the top of the Cybersecurity and Infrastructure Security Agency, which was created during Trump’s first term and where current director Jen Easterly has announced she will leave once Trump is inaugurated.

Cyber Command 2.0 and the U.S. military

John Cohen, executive director of the Program for Countering Hybrid Threats at the Center for Internet Security, is among those who share the Pentagon’s concerns. “We can no longer afford to operate in stovepipes,” Cohen said, warning that a separate cyber branch could worsen existing silos and further isolate cyber operations from other critical military efforts.

Cohen emphasized that adversaries like China and Russia employ cyber tactics as part of broader, integrated strategies that include economic, physical, and psychological components. To counter such threats, he argued, the U.S. needs a cohesive approach across its military branches. “Confronting that requires our military to adapt to the changing battlespace in a consistent way,” he said.

In 2018, CYBERCOM certified its Cyber Mission Force teams as fully staffed, but concerns have been expressed by the FDD and others that personnel were shifted between teams to meet staffing goals — a move they say masked deeper structural problems. Nakasone has called for a CYBERCOM 2.0, saying in comments early this year “How do we think about training differently? How do we think about personnel differently?” and adding that a major issue has been the approach to military staffing within the command.

Austin Berglas, a former head of the FBI’s cyber program in New York who worked on consolidation efforts inside the Bureau, believes a separate cyber force could enhance U.S. capabilities by centralizing resources and priorities. “When I first took over the [FBI] cyber program … the assets were scattered,” said Berglas, who is now the global head of professional services at supply chain cyber defense company BlueVoyant. Centralization brought focus and efficiency to the FBI’s cyber efforts, he said, and it’s a model he believes would benefit the military’s cyber efforts as well. “Cyber is a different beast,” Berglas said, emphasizing the need for specialized training, advancement, and resource allocation that isn’t diluted by competing military priorities.

Berglas also pointed to the ongoing “cyber arms race” with adversaries like China, Russia, Iran, and North Korea. He warned that without a dedicated force, the U.S. risks falling behind as these nations expand their offensive cyber capabilities and exploit vulnerabilities across critical infrastructure.

Nakasone said in his comments earlier this year that a lot has changed since 2013 when U.S. Cyber Command began building out its Cyber Mission Force to combat issues like counterterrorism and financial cybercrime coming from Iran. “Completely different world in which we live in today,” he said, citing the threats from China and Russia.

Brandon Wales, a former executive director of the CISA, said there is the need to bolster U.S. cyber capabilities, but he cautions against major structural changes during a period of heightened global threats.

“A reorganization of this scale is obviously going to be disruptive and will take time,” said Wales, who is now vice president of cybersecurity strategy at SentinelOne.

He cited China’s preparations for a potential conflict over Taiwan as a reason the U.S. military needs to maintain readiness. Rather than creating a new branch, Wales supports initiatives like Cyber Command 2.0 and its aim to enhance coordination and capabilities within the existing structure. “Large reorganizations should always be the last resort because of how disruptive they are,” he said.

Wales says it’s important to ensure any structural changes do not undermine integration across military branches and recognize that coordination across existing branches is critical to addressing the complex, multidomain threats posed by U.S. adversaries. “You should not always assume that centralization solves all of your problems,” he said. “We need to enhance our capabilities, both defensively and offensively. This isn’t about one solution; it’s about ensuring we can quickly see, stop, disrupt, and prevent threats from hitting our critical infrastructure and systems,” he added.

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