AI Data Wars Escalate: Reddit Sues Perplexity Over Aggressive User Data Scraping

Reddit draws first blood in the AI data arms race—filing a landmark lawsuit against Perplexity AI for allegedly harvesting user content without permission.

The Legal Battlefield

Reddit's legal team claims Perplexity systematically scraped millions of user posts, comments, and discussions—bypassing technical barriers meant to protect community content. The social media giant argues this constitutes unauthorized data extraction on an industrial scale.

Data Gold Rush

As AI companies scramble to feed their hungry algorithms, user-generated content has become the new oil—and everyone's drilling. Reddit's move signals platforms are no longer willing to be passive data reservoirs for third-party AI training.

The lawsuit could set precedent for how AI firms access and utilize public web data—potentially forcing them to actually pay for the content that powers their billion-dollar valuations. Because nothing says 'innovation' like taking other people's work without asking.

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Reddit Strikes Back

Reddit alleges that the data-scraping companies bypassed its security measures to take content that Perplexity urgently needs to power its AI “answer engine” system.

According to a complaint filed Wednesday in Manhattan federal court, three data-scraping companies—Oxylabs UAB, AWMProxy, and SerpApi—have been gathering Reddit data through Google (GOOGL) search results to resell it. The lawsuit claims that Perplexity purchased data from at least one of these companies. Under this lawsuit, Reddit is asking for financial compensation, a permanent court order, and a ban on using or selling the scraped data.

The Fight for AI Data Heats Up

This lawsuit is part of a growing wave of cases from content owners claiming that tech firms are misusing copyrighted material to train AI systems. Notably, Reddit has agreements with OpenAI () and Google (GOOGL) to license its data for AI training, but it is suing other companies it believes are using the data without permission. In June, Reddit filed a similar suit against AI startup Anthropic, which is still ongoing.

These cases also highlight the rising importance and value of original user data, which remains a key asset in the fast-growing AI industry.

Is Reddit a Good Stock Buy?

Turning to Wall Street, the analysts’ consensus rating for RDDT stock is Moderate Buy, based on 16 Buys and eight Holds assigned over the past three months. At $237.66, the average stock price target for Reddit implies over 20% upside from the current level.