Social media platform Reddit Inc. (NYSE:RDDT) witnessed a significant surge in its stock value after the company announced a policy update to block automated website scraping.

What Happened: Reddit’s stock rose by almost 9% following the announcement of a new policy. The company, in a blog post, detailed the changes it is making to its Robots Exclusion Protocol (robots.txt file) to enforce its Public Content Policy, which governs the use of public content on Reddit.

Reddit underscored that it will also use other tools like rate limits and blocking unknown crawlers from its platform to make sure its content is not scraped by unauthorized parties.

This comes in the wake of leading AI companies like Microsoft Corp.-backed OpenAI, Alphabet Inc. and Amazon.com Inc.-backed Anthropic, and Nvidia Corp.-backed Perplexity AI reportedly ignoring the robots.txt files of publishers.

Reddit’s update is expected to be implemented in the coming weeks. The social media platform says that this will not affect the majority of Reddit users, including researchers and non-commercial organizations like the Internet Archive, who will still have access to Reddit content.

Mark Graham, Director, of Wayback Machine at Internet Archive said, “The Internet Archive is grateful that Reddit appreciates the importance of helping to ensure the digital records of our times are archived and preserved for future generations to enjoy and learn from.”

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Why It Matters: The decision to update the robots.txt file comes in the wake of increasing concerns about tech companies using content from publishers to train AI algorithms and create search query summaries. This move by Reddit is seen as a proactive step to protect its content and the interests of its users.

Price Action: Reddit Inc. stock closed at $61.38 on Tuesday, marking an increase of 8.68% for the day. In after-hours trading, the stock fell 0.29%, bringing the price to $61.20. Over the past year, Reddit’s stock has risen by 21.69%, according to data from Benzinga Pro.

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Photo courtesy: Shutterstock

This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote