Reddit Stock Soars Following OpenAI Partnership Announcement

Reddit Stock Soars Following OpenAI Partnership Announcement

Reddit and OpenAI, the creator of the artificial intelligence (AI) chatbot ChatGPT, announced a partnership to benefit both the Reddit and OpenAI user communities in various ways.

According to data from Google Finance, Reddit’s stock experienced a 13% surge in after-hours trading immediately following the announcement.

Reddit and OpenAI’s Partnership

On May 16, Reddit announced its decision to grant OpenAI access to its Data API, offering real-time, structured, and exclusive content sourced from platform posts. This collaboration will integrate the social media content into ChatGPT and other upcoming products, facilitating user exploration and interaction with Reddit communities.

In return, OpenAI will provide Reddit users and moderators with various innovative AI-driven features designed to enhance user engagement. Reddit will leverage OpenAI’s AI models to realize its ambitious vision. Additionally, Reddit has appointed OpenAI as its newest advertising partner.

In a statement, Steve Huffman, Co-Founder and CEO of Reddit, expressed enthusiasm for the partnership:

“Reddit has become one of the internet’s largest open archives of authentic, relevant, and always up-to-date human conversations about anything and everything,” remarked Huffman.

“Including it in ChatGPT upholds our belief in a connected internet, helps people find more of what they’re looking for, and helps new audiences find community on Reddit.”

Brad Lightcap, Chief Operating Officer at OpenAI, highlighted the potential for ChatGPT to deliver timely and relevant information to users while enhancing the Reddit experience with AI-driven features.

Meanwhile, Reddit disclosed in a February filing with the SEC that it has been investing in cryptocurrencies since 2022. The filing revealed that the company had allocated a portion of its excess cash to Bitcoin (BTC) and Ether (ETH), with additional investments in the Ethereum-based token Polygon (MATIC).

Legal Challenges for AI Companies

This collaboration follows a similar deal struck between Google and Reddit, wherein the former gained access to the latter’s content to train its AI models. Reddit intends to use the cloud partnership with Google, which leverages Vertex AI, to increase search functionality and other capabilities on the platform.

This deal comes amidst growing legal challenges, where OpenAI and other AI companies find themselves in controversy over their data acquisition practices for model training.

Reports indicate that on May 16, Sony, the world’s largest music publisher, took action by sending letters to more than 700 entities, including prominent AI developers like OpenAI, Microsoft, and Google. Sony expressed concerns that these companies might have engaged in “unauthorized uses” of its music to train their models.

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