Reddit shares increased by 11% in extended trading on Thursday after announcing a partnership with OpenAI to train artificial intelligence models using Reddit content.
According to a release, OpenAI will have access to Reddit’s Data application programming interface, or API, “which provides real-time, structured, and unique content from Reddit,” as part of the agreement.
In exchange, Reddit will begin to offer specific AI features to users and moderators, powered by OpenAI, which will also become a Reddit advertising partner. In February, Google announced a partnership with Reddit to train AI models, including Gemini, using the platform’s API.
“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,” CEO Steve Huffman stated in a press release issued Thursday. “Including it in ChatGPT upholds our belief in a connected internet, helps people find more or what they’re looking for, and helps new audiences find community on Reddit.”
OpenAI CEO Sam Altman is a former board member and big shareholder in Reddit, with a stake worth approximately $750 million following Thursday’s surge. The deal was driven by OpenAI Chief Operating Officer Brad Lightcap and authorized by the company’s board, according to the release.
Earlier this week, OpenAI released a new AI model and desktop version of ChatGPT, as well as an enhanced user interface, as part of its ongoing efforts to broaden the use of its popular chatbot. In a livestreamed event on Monday, Chief Technology Officer Mira Murati announced that the update makes GPT-4 available to everyone, including OpenAI’s free users.
Murati stated that the new model, GPT-4o, is “much faster,” with greater text, video, and audio capabilities. OpenAI stated that it eventually intends to allow users to video communicate with ChatGPT.
The deal adds to Reddit’s recent bounce, which was fueled by a rise in meme stocks like GameStop. Reddit, which went public in March and set a record close a few days later, is now trading near its high of $65.11.
