What if I instructed you that the largest winner on this AI arms race is not OpenAI, Meta, Google… and even DeepSeek?
This firm is quietly profitable, and no person’s speaking about it. 🫣
And once I say profitable, I do not imply hype.
“Sooner or later, a magical firm will change the world and revolutionize AI blah blah blah…”
Nah!!!
This ain’t hypothetical.
They’re getting paid. Right now. Cash within the financial institution. Not “doubtlessly” profitable. They’re already profitable.
However they’re chilling within the reduce like peroxide.
And I do know what you are pondering. 🤔
It ain’t Nvidia, both. Once I say zero hype, I MEAN ZERO. It is giving diamond within the tough vibes.
The wildest half is that they have been round for 20+ years and solely now began making actual cash.
On this article, we’re gonna break all of it down:
- Who this unlikely AI winner is
- How this occurred
- How one can take benefit
Buckle up. That is gonna be one. Like a Martin Scorsese film, I PROMISE YOU… you will not see this plot twist coming. 🤞
Fast intro
To grasp how I found this juggernaut hiding in plain sight, first, you should know who I’m and what I do for a residing.
My title is Lester, however be at liberty to name me Les. 👋
I am a founder with a profitable exit below my belt. Lately, I am the exec chair for a bunch of ecom manufacturers, however at my core, I am an award-winning efficiency marketer.
Evidently, knowledge and insights are my jam. We function extra like a knowledge firm than an ecom model. Our secret sauce? Pairing knowledge and insights with concepts that generate income.
In case you’re into data-driven enterprise, advertising insights, and methods, try my free e-newsletter, No Fluff Simply Info. I break down what’s working in enterprise with no fluff, simply advertising insights and developments that matter.
However sufficient about me. 🤓
Understanding the AI panorama
Earlier than I leap into the who, I must carry you on top of things.
I do know I want to come back out with it, however this context is important so that you can spot the subsequent development by yourself.
As , there may be a lot hype and hypothesis about AI that DeepSeek made an announcement and the market crashed by trillions of {dollars}. Sure, trillion with a T. 🤯
There is no such thing as a denying that AI is right here and can play a task in our future, however how do you establish the actual from the pretend?
This is how I give it some thought.
Who bought wealthy throughout the gold rush? The man promoting the shovel.
Who bought wealthy throughout the dot-com bubble? The telecom corporations.
See the sample? 👀
When investing, whether or not financially or allocating sources, I desire to wager on the trade moderately than a single firm. That is very true within the early levels when success is dependent upon many components aligning.
So, with that mindset, I began pondering: If we’re betting on AI as an trade, who wins? The place’s the chance?
To understand why this sleeper firm is profitable, you will need to first perceive how AI is shaping up behind the scenes.
Proper now, AI is in a hyper-growth part. It is extra just like the early days of the dot-com growth: cash flying in all places, however only a few corporations are literally being profitable.
On the core of AI, there are three key gamers:
The Mannequin Builders — OpenAI, Google DeepMind, Anthropic. These are the businesses constructing large AI fashions. They want a substantial quantity of knowledge and computing energy, which means they’re at the moment spending far more than they’re making.
The Infrastructure Suppliers – Nvidia, AWS, Microsoft Azure. These corporations promote the computing energy, cloud storage, and GPUs that AI fashions desperately want. They’re being profitable, however they don’t seem to be the entire story.
The Knowledge House owners – That is the place issues get attention-grabbing. AI fashions want coaching knowledge to get smarter. The issue? Many of the web’s knowledge is free and unstructured.
Utilizing the gold rush as our blueprint, we see the actual alternatives fall into two classes: Infrastructure and Knowledge House owners.
I instantly dominated out Nvidia. Why? Too apparent. 😅
Apart from, I am not searching for a inventory decide; I am searching for alternatives from which I can profit.
With that in thoughts, what I found was mind-blowing.
This firm:
- ✅ Does not need to construct AI fashions despite the fact that they most likely may.
- ✅ Does not need to promote GPUs.
- ✅ All they need to do is license the information they have already got.
So, who is that this winner nobody is speaking about?
Reddit. 😱
The large winner
Yup. That Reddit. I instructed you this was a Martin Scorsese plot twist.
In case you’re unfamiliar with Reddit, it’s a social media platform and dialogue website the place customers share content material, talk about matters, and vote on posts. It is typically referred to as “The Entrance Web page of the Web.”
Based in 2005 by Alexis Ohanian and Steve Huffman, it was initially meant to be a food-ordering app referred to as My Cell Menu.
Good name pivoting to social media, lol. 🤣
Right here is why they’re profitable… AI fashions want human-generated content material for coaching. Reddit simply so occurs to have one of many largest human dialog datasets on this planet.
What makes this so invaluable is the standard of the conversations. The web is filled with junk, however Reddit’s discussions are actual, unfiltered, and human. In contrast to algorithm-driven platforms, that is uncooked, pure interplay, which is exactly what AI wants to know human conduct.
Reddit is the shovel of this AI revolution. 🤓☝️
In Might 2024, Reddit signed a cope with OpenAI to promote entry to its knowledge, which led to its first worthwhile quarter ever in Q3 2024, with 68% income development to $348.4 million and a web revenue of $29.9 million.
Within the final six months, Reddit’s inventory is up 236% on the time of writing.
The income development comes from adverts and knowledge licensing, with AI corporations paying high greenback for Reddit’s content material.
Evidently, I am bullish on Reddit. 🚀
The chance!
Reddit has develop into essential for AI improvement, and nobody else comes near having this stage of wealthy, human-generated knowledge. It is seen because the final city sq. without cost human dialog.
Right here is your alternative. 🧐
Whereas it is evident that Reddit is value watching within the inventory market (not monetary recommendation), its newfound profitability means it should seemingly make investments extra within the platform to enhance consumer expertise, add new options, and scale its attain.
However here’s what I discover actually attention-grabbing.
In 2019, Reddit had 430 million month-to-month energetic customers. By the top of 2024, that quantity hit 1.21 billion. That is vital as a result of it is a mature platform, not a startup. This type of development at this stage is significant and one thing to concentrate to.
I am completely speculating right here, however this development in the end comes from customers craving actual human connections.
No bots. No algorithm force-feeding them content material they do not need. 🤗
It is genuine human interplay.
That is the place I see a chance to market your services or products.
Wherever folks collect, there’s potential to attach with the appropriate viewers. Now that Reddit is worthwhile, it is prone to spend money on the platform, doubtlessly making it a much bigger contender within the digital advertising area alongside Meta and Google.
That mentioned, Reddit’s neighborhood is not like another. You neeeeeeeeedddddddddd to be genuine or you will get cooked.
Give attention to offering worth, and do not attempt to be too salesy. Discover methods so as to add to the dialog moderately than take.
Here’s a hyperlink to some Reddit case research so you will get a really feel of what works. 📈
My two cents
I will depart you with this.
We must always keep watch over Reddit from a inventory efficiency perspective and as a possible new site visitors supply to scale back dependence on Meta and Google. 👀
The true alternative is not simply in AI or anybody platform however in how we adapt as issues shift. Platforms come and go, algorithms change, and tech retains evolving, however the objective is at all times to achieve the appropriate folks in a approach that truly issues.
By the best way, if you’d like extra data-driven enterprise insights like this, join my free e-newsletter, No Fluff Simply Info. I share what’s working, the most recent developments, and the occasional pep speak to maintain you impressed. If this feels like your jam, click on right here to enroll; it’s very free. 🤗
😇 Hope this helps. I am rooting for you.
