“OpenAI and Reddit Forge Partnership to Enhance AI Features and Content Sharing”
OpenAI has announced a collaboration with Reddit Inc., integrating the social platform’s content into ChatGPT and other OpenAI products, while also introducing new AI capabilities to Reddit’s communities. Following the announcement, Reddit’s stock saw an 11% increase in after-hours trading.
The partnership aims to enhance OpenAI’s AI tools’ understanding and presentation of Reddit content, particularly on recent topics, according to a joint statement released by the companies. Additionally, Reddit plans to provide its users with new AI-driven tools developed using OpenAI’s models, and OpenAI will join Reddit as an advertising partner. The financial terms of the agreement were not disclosed.
Last week, Reddit updated its data usage policies to foster more licensing deals with AI developers and other businesses, aiming to boost its revenue. After going public in March, Reddit had previously secured a $60 million deal with Alphabet Inc.’s Google in January to support the training of large language models, a key component of generative AI technology. To date, Reddit has entered into licensing agreements totaling $203 million, with durations ranging from two to three years.
OpenAI is expanding its collaborations with media outlets to train its AI systems and incorporate more up-to-date content into its ChatGPT chatbot. Earlier this month, OpenAI signed agreements with Dotdash Meredith and the Financial Times in April.
Sam Altman, CEO of OpenAI, has a significant history with Reddit, having been one of its major shareholders at the time of its IPO and serving briefly as Reddit’s interim CEO in 2014. The partnership was spearheaded by OpenAI’s COO Brad Lightcap and received approval from its independent directors.
Reddit’s stock, which had dropped 5.5% to $56.38 in New York trading, surged to as high as $64.75 following the partnership announcement, marking a 66% increase since its IPO.
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