Reddit Stock Soars Following OpenAI Partnership Announcement

Reddit and OpenAI, creator of the ChatGPT AI chatbot, have announced a partnership to benefit Reddit and OpenAI's user communities in various ways.

according to Data From Google Finance, Reddit stock saw a 13% spike in after-hours trading immediately after the announcement.

Reddit and OpenAI partnership

On May 16, Reddit announced its decision to grant OpenAI access to its Data API, providing curated and exclusive real-time content sourced from the platform's posts. This collaboration will integrate social media content into ChatGPT and other upcoming products, making it easier for user exploration and interaction with Reddit communities.

Reddit and OpenAI today announced a partnership to benefit the Reddit and OpenAI user communities in several ways. Learn more on our company blog. https://t.co/qah9TaRjVU

– Reddit (@Reddit) May 16, 2024

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

In a statement, Reddit co-founder and CEO Steve Huffman said: I expressed Enthusiasm for 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,” Huffman said.

“Including it in ChatGPT supports 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, COO of OpenAI, highlighted the potential for ChatGPT to deliver relevant and timely information to users while enhancing the Reddit experience with AI-based features.

Meanwhile, Reddit revealed in a February filing with the Securities and Exchange Commission that it has been investing in cryptocurrencies since 2022. The filing revealed that the company allocated a portion of its excess cash to Bitcoin (BTC) and Ethereum (ETH), with additional investments in the existing token. On Ethereum (MATIC).

Legal challenges for artificial intelligence companies

This collaboration comes on the heels of a similar deal reached between Google and Reddit, which was the first acquired Access the latter's content to train its AI models. Reddit intends to use its cloud partnership with Google, which leverages Vertex AI, to increase search functionality and other capabilities on the platform.

The deal comes amid mounting legal challenges, as OpenAI and other AI companies find themselves in controversy over their practices in sourcing data for model training.

Reports Indicates On May 16, Sony, the world's largest music publisher, took action by sending letters to more than 700 entities, including prominent AI developers such as OpenAI, Microsoft, and Google. Sony expressed concerns that these companies may be involved in “unauthorized uses” of its music to train its models.