Reddit sues AI startup Anthropic for breach of contract, ‘unfair competition’

Reddit is suing artificial intelligence startup Anthropic for what it’s calling a breach of contract and for engaging in “unlawful and unfair business acts” by using the social media company’s platform and data without authority.

The lawsuit, filed in San Francisco on Wednesday, claims that Anthropic has been training its models on the personal data of Reddit users without obtaining their consent. Reddit alleges that’s has been harmed by the unauthorized commercial use of its content.

Reddit shares closed up more than 6% on Wednesday.

The company opened the complaint by calling Anthropic a “late-blooming” AI company that “bills itself as the white knight of the AI industry.” Reddit follows by saying, “It is anything but.”

“For its part, despite what its marketing material says, Anthropic does not care about Reddit’s rules or users: it believes it is entitled to take whatever content it wants and use that content however it desires,
with impunity,” the filing said.

In an emailed statement, an Anthropic spokesperson said, “We disagree with Reddit’s claims and will defend ourselves vigorously.”

Since the generative AI boom began with the launch of OpenAI’s ChatGPT in late 2022, Reddit has been at the forefront of the conversation. Its 20-year-old site is filled with user-generated information about hundreds of thousands of topics and has been a main source of training for large AI models, including Anthropic’s Claude.

Reddit announced a partnership with OpenAI in May that will allow the company to train its AI models on Reddit content. The company has a similar agreement with Google.

In the lawsuit, Reddit said that “other giants in the AI space understand and respect Reddit’s rules.” It named OpenAI and Google as companies that “are permitted to use public Reddit content but only after agreeing to Reddit’s licensing terms” protecting user privacy.

OpenAI CEO Sam Altman is a former board member and major shareholder in Reddit, with a stake now worth well over $1 billion.

In March, Anthropic was valued at $61.5 billion in a funding round led by Lightspeed Venture Partners, and including participation from Salesforce Ventures and Cisco Investments. The company, founded in 2021 by ex-OpenAI executives, has been backed heavily by Amazon.

Reddit held its IPO in 2024 and now has a market cap of about $22 billion.

Reddit says it has established rules dictating how its data can be used, which the company says in the filing “are clearly memorialized” in the Reddit’s user agreement.

“While Reddit has always been of the mind that the community should be open to all humans looking for connection and community, it has never allowed its platform and the countless communities who find a home on it to be appropriated by commercial actors seeking to create billion-dollar enterprises and offering nothing in return to Reddit and its users,” the complaint says.

Reddit said the aim of the lawsuit is to seek damages and compel Anthropic to abide by its contractual and legal obligations. It’s asking for a jury trial.

WATCH: Reddit sues Anthropic alleging wrongful use of content