What if I advised 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 after I say profitable, I do not imply hype.
“In the future, a magical firm will change the world and revolutionize AI blah blah blah…”
Nah!!!
This ain’t hypothetical.
They’re getting paid. In the present day. Cash within the financial institution. Not “doubtlessly” profitable. They’re already profitable.
However they’re chilling within the lower like peroxide.
And I do know what you are considering. 🤔
It ain’t Nvidia, both. After 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 a superb one. Like a Martin Scorsese film, I PROMISE YOU… you will not see this plot twist coming. 🤞
Fast intro
To know how I found this juggernaut hiding in plain sight, first, that you must know who I’m and what I do for a dwelling.
My title is Lester, however be at liberty to name me Les. 👋
I am a founder with a profitable exit underneath my belt. Lately, I am the exec chair for a gaggle of ecom manufacturers, however at my core, I am an award-winning efficiency marketer.
For sure, knowledge and insights are my jam. We function extra like an information 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 techniques, try my free e-newsletter, No Fluff Simply Details. I break down what’s working in enterprise with no fluff, simply advertising insights and tendencies that matter.
However sufficient about me. 🤓
Understanding the AI panorama
Earlier than I leap into the who, I have to carry you up to the mark.
I do know I would like to return out with it, however this context is crucial so that you can spot the subsequent pattern by yourself.
As you realize, there’s 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?
Here is how I give it some thought.
Who obtained wealthy in the course of the gold rush? The man promoting the shovel.
Who obtained wealthy in the course of the dot-com bubble? The telecom corporations.
See the sample? 👀
When investing, whether or not financially or allocating sources, I want to guess on the trade quite than a single firm. That is very true within the early levels when success is dependent upon many elements aligning.
So, with that mindset, I began considering: If we’re betting on AI as an trade, who wins? The place’s the chance?
To know why this sleeper firm is profitable, it’s essential 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 increase: cash flying in all places, however only a few corporations are literally getting cash.
On the core of AI, there are three key gamers:
The Mannequin Builders — OpenAI, Google DeepMind, Anthropic. These are the businesses constructing huge AI fashions. They want a substantial quantity of knowledge and computing energy, which means they’re presently 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 getting cash, however they don’t seem to be the entire story.
The Knowledge House owners – That is the place issues get fascinating. 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 on the lookout for a inventory choose; I am on the lookout 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 might.
- ✅ Does not need to promote GPUs.
- ✅ All they need to do is license the info they have already got.
So, who is that this winner nobody is speaking about?
Reddit. 😱
The large winner
Yup. That Reddit. I advised 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 subjects, and vote on posts. It is typically known 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 known as My Cellular 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 the earth.
What makes this so helpful is the standard of the conversations. The web is filled with junk, however Reddit’s discussions are actual, unfiltered, and human. Not like algorithm-driven platforms, that is uncooked, pure interplay, which is exactly what AI wants to know human habits.
Reddit is the shovel of this AI revolution. 🤓☝️
In Might 2024, Reddit signed a take care of 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 internet 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 advertisements and knowledge licensing, with AI corporations paying high greenback for Reddit’s content material.
For sure, I am bullish on Reddit. 🚀
The chance!
Reddit has change 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 spending a dime 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 is going to doubtless make investments extra within the platform to enhance person expertise, add new options, and scale its attain.
However here’s what I discover actually fascinating.
In 2019, Reddit had 430 million month-to-month energetic customers. By the top of 2024, that quantity hit 1.21 billion. That is important as a result of it is a mature platform, not a startup. This sort of development at this stage is significant and one thing to concentrate to.
I am completely speculating right here, however this development finally 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 correct 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 house alongside Meta and Google.
That stated, Reddit’s neighborhood is not like every other. You neeeeeeeeedddddddddd to be genuine or you will get cooked.
Concentrate on offering worth, and do not attempt to be too salesy. Discover methods so as to add to the dialog quite 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 am going to depart you with this.
We must always keep watch over Reddit from a inventory efficiency perspective and as a possible new visitors supply to scale back dependence on Meta and Google. 👀
The actual alternative is not simply in AI or anyone platform however in how we adapt as issues shift. Platforms come and go, algorithms change, and tech retains evolving, however the aim is all the time to achieve the correct folks in a manner that really issues.
By the best way, in order for you extra data-driven enterprise insights like this, join my free e-newsletter, No Fluff Simply Details. I share what’s working, the most recent tendencies, and the occasional pep discuss to maintain you impressed. If this seems like your jam, click on right here to enroll; it’s very free. 🤗
😇 Hope this helps. I am rooting for you.
