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Reddit Announces Content Partnership with OpenAI, Shares Rise 15%

Bruno T
Latest News
May 17 2024 8:50AM

OpenAI and Reddit announced a new partnership on Thursday, a move that will bring content from the social media platform to ChatGPT. The agreement will help Reddit further diversify its revenue streams.

“OpenAI will bring enhanced Reddit content to ChatGPT and new products, helping users discover and engage with Reddit communities,” the companies said in a joint statement.

The news caused Reddit’s shares to rise 15% after market close.

OpenAI will also have access to Reddit’s data API, which will allow the company’s AI tools to “better understand and present Reddit content, especially on recent topics,” according to the statement.

Reddit, in turn, will gain a new advertising partner in OpenAI. The value of the agreement was not disclosed, according to Business Insider.

OpenAI CEO Sam Altman, who holds an approximately 10% stake in Reddit, did not participate in this negotiation, according to the company. Altman, who has previously stated that he does not hold shares in the company that created ChatGPT, made a good profit earlier this year when Reddit announced its IPO.

ChatGPT’s Relationship with Media Outlets

OpenAI has closed a series of deals with media outlets this year, including the Financial Times, the Associated Press, Axel Springer, Le Monde, and Prisa Media. These agreements give the San Francisco-based startup access to materials that can, in turn, be used to develop and execute generative AI technology capable of creating text, images, and code from human requests.

Other companies, however, have taken legal action against OpenAI.

According to the Financial Times, the New York Times and other publishers sued OpenAI and Microsoft for collecting their articles. In December, the NYT filed a lawsuit seeking billions of dollars in damages from the two companies for “profiting from massive copyright infringement, commercial exploitation, and misappropriation of The Times’ intellectual property.” OpenAI claimed the lawsuit is “without merit.”

Last month, eight regional US newspapers, including the New York Daily News and the Chicago Tribune, also sued the companies for copyright infringement.