What if I instructed you that the largest winner on this AI arms race isn't OpenAI, Meta, Google… and even DeepSeek?
This firm is quietly profitable, and no one's speaking about it. 🫣
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And after I say profitable, I don't 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. Right now. 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're considering. 🤔
It ain't Nvidia, both. After I say zero hype, I MEAN ZERO. It's giving diamond within the tough vibes.
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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 gained't see this plot twist coming. 🤞
Fast intro
To know how I found this juggernaut hiding in plain sight, first, it’s worthwhile to know who I’m and what I do for a dwelling.
My identify is Lester, however be at liberty to name me Les. 👋
I'm a founder with a profitable exit beneath my belt. As of late, I'm the exec chair for a bunch of ecom manufacturers, however at my core, I'm an award-winning efficiency marketer.
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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.
When you're into data-driven enterprise, advertising insights, and methods, try my free publication, No Fluff Just Facts. 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 deliver you up to the mark.
I do know I want to return out with it, however this context is vital so that you can spot the following pattern by yourself.
As you already know, 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 isn’t any denying that AI is right here and can play a job in our future, however how do you determine the true from the pretend?
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Right here's 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 firms.
See the sample? 👀
When investing, whether or not financially or allocating assets, I desire to wager on the trade relatively than a single firm. That is very true within the early levels when success will depend on 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 understand why this sleeper firm is profitable, you need to first perceive how AI is shaping up behind the scenes.
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Proper now, AI is in a hyper-growth section. It's extra just like the early days of the dot-com growth: cash flying in every single place, however only a few firms are literally making a living.
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 information and computing energy, that means they’re at present spending far more than they're making.
The Infrastructure Suppliers – Nvidia, AWS, Microsoft Azure. These firms promote the computing energy, cloud storage, and GPUs that AI fashions desperately want. They're making a living, however they're not the entire story.
The Knowledge Homeowners – That is the place issues get attention-grabbing. AI fashions want coaching knowledge to get smarter. The issue? A lot of the web's knowledge is free and unstructured.
Utilizing the gold rush as our blueprint, we see the true alternatives fall into two classes: Infrastructure and Knowledge Homeowners.
I instantly dominated out Nvidia. Why? Too apparent. 😅
In addition to, I'm not on the lookout for a inventory decide; I'm on the lookout for alternatives from which I can profit.
With that in thoughts, what I found was mind-blowing.
This firm:
- ✅ Doesn't should construct AI fashions although they in all probability may.
- ✅ Doesn't should promote GPUs.
- ✅ All they should 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.
When you're unfamiliar with Reddit, it’s a social media platform and dialogue website the place customers share content material, focus on matters, and vote on posts. It's 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. 🤣
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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 planet.
What makes this so worthwhile is the standard of the conversations. The web is stuffed 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 Could 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 progress 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.
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The income progress comes from advertisements and knowledge licensing, with AI firms paying prime greenback for Reddit's content material.
Evidently, I'm bullish on Reddit. 🚀
The chance!
Reddit has change into essential for AI improvement, and nobody else comes near having this degree of wealthy, human-generated knowledge. It's seen because the final city sq. at no cost human dialog.
Right here is your alternative. 🧐
Whereas it's 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.
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In 2019, Reddit had 430 million month-to-month lively customers. By the tip 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 progress at this stage is significant and one thing to concentrate to.
I'm completely speculating right here, however this progress finally comes from customers craving actual human connections.
No bots. No algorithm force-feeding them content material they don't need. 🤗
It's genuine human interplay.
That is the place I see a possibility to market your services or products.
Wherever individuals collect, there's potential to attach with the precise viewers. Now that Reddit is worthwhile, it's prone to spend money on the platform, doubtlessly making it an even bigger contender within the digital advertising area alongside Meta and Google.
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That mentioned, Reddit's neighborhood isn't like another. You neeeeeeeeedddddddddd to be genuine or you will get cooked.
Concentrate on offering worth, and don't attempt to be too salesy. Discover methods so as to add to the dialog relatively than take.
Here’s a hyperlink to some Reddit case research so you may get a really feel of what works. 📈
My two cents
I'll depart you with this.
We must always regulate Reddit from a inventory efficiency perspective and as a possible new site visitors supply to scale back dependence on Meta and Google. 👀
The actual alternative isn't 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 objective is all the time to succeed in the precise individuals in a manner that really issues.
By the way in which, if you need extra data-driven enterprise insights like this, join my free publication, No Fluff Just Facts. I share what's working, the most recent developments, and the occasional pep speak to maintain you impressed. If this appears like your jam, click here to sign up; it's completely free. 🤗
😇 Hope this helps. I'm rooting for you.