March 5 (Reuters) - Digg founder Kevin Rose has teamed up with former rival Alexis Ohanian to buy the once-popular content aggregator as they bet on an artificial intelligence-powered revival of the platform that once drew around 40 million monthly visitors.

Launched in 2004 by a then 27-year-old Rose, Digg was once called the "homepage of the internet" and was a rival to Reddit RDDT.N, a firm co-founded by Ohanian.

But the platform lost ground after its 2012 sale to New York-based tech incubator Betaworks. Microsoft's MSFT.O LinkedIn scooped up its most valuable assets, including patents. It has since pivoted to curating news.

Rose and Ohanian, who acquired Digg for an undisclosed sum, said on Wednesday they aim to revive the platform by leveraging their social media expertise, restoring its nostalgic early interface.

Digg's early model allowed users to "digg" or "bury" content— an early precursor to how social media platforms surface viral stories today.

The duo also plans to use AI-driven curation to curb misinformation and toxic discourse.

"Recently we've hit an inflection point where AI can become a helpful co-pilot to users and moderators, not replacing human conversation, but rather augmenting it," Rose said.

He added that he had been approached several times over the past years to buy Digg but it "never felt right" before.

Invites for the new version will roll out in the coming weeks, as Digg prepares to reenter a crowded social media landscape where smaller players such as Pinterest are jostling for ad dollars and user attention with giants such as Meta.

Justin Mezzell, a longtime collaborator of Rose with experience at Google and Facebook, will take over as Digg CEO.

The deal is backed by venture capital firms True Ventures, where Rose is a partner, and Ohanian's Seven Seven Six. Rose will be Digg's board chair and key advisor.

Ohanian has also joined a bid led by former Los Angeles Dodgers owner Frank McCourt to acquire TikTok's U.S. operations.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Leroy Leo)

((Jaspreet.Singh@thomsonreuters.com; on X @i_jass;))