Reddit Partners With OpenAI: Bringing Content to ChatGPT

Reddit has formed a partnership with OpenAI to integrate content into ChatGPT.

Reddit Inc. has established a partnership with OpenAI, enabling the integration of its content into the chatbot ChatGPT and other products. Additionally, this collaboration will assist the social media company in incorporating new artificial intelligence features into its forums.

Reddit Inc. has partnered with OpenAI to integrate its content into the chatbot ChatGPT and other products. This collaboration will also support Reddit in enhancing its forums with new artificial intelligence features.

After the announcement, shares of Reddit, which went public in March, surged by up to 15% in late trading.

The agreement between Reddit and OpenAI "will enable OpenAI’s AI tools to better understand and showcase Reddit content, especially on recent topics," the companies stated in a joint announcement on Thursday. This deal allows OpenAI to utilize Reddit's content and train AI systems using the data provided by its partner.

In return, Reddit will provide its users with new AI-based tools developed using models created by OpenAI, and OpenAI will display ads on Reddit's platform. The financial terms of the agreement were not disclosed.

Reddit's content has been widely used as a valuable source of training data for developing AI models, including those by OpenAI. Last week, Reddit introduced new policies regarding the use of its data, as part of its strategy to increase revenue through licensing agreements with artificial intelligence developers and other companies.

"Our data is extremely valuable," stated Chief Executive Officer Steve Huffman at the Bloomberg Technology Summit earlier this month. "We’re seeing a ton of interest in it."

Reddit's pursuit of new revenue opportunities was highlighted ahead of its IPO. In January, the company signed a $60 million agreement with Alphabet Inc.'s Google to assist in training large language models, which are the foundation of generative AI technology.

While Huffman did not delve into the specifics of the Google deal, he mentioned that typical terms might include limitations on the duration for which a Reddit summary appears in Google search results or requirements for displaying Reddit branding in AI-generated outcomes. Reddit, headquartered in San Francisco, has inked licensing agreements totaling $203 million, with durations ranging from two to three years, and is currently exploring additional licensing deals.

OpenAI is actively forming partnerships with media companies to enhance its AI systems and incorporate more real-time content into its chatbot, ChatGPT. Earlier this month, the maker of ChatGPT also struck deals with Dotdash Meredith, the publisher of People Magazine, and in April with the Financial Times.

Backed by Microsoft Corp., OpenAI has become a key player in AI development. CEO Sam Altman has a significant history with Reddit, being one of the company's largest shareholders during its IPO earlier this year and briefly serving as Reddit's interim CEO in 2014.

The partnership between Reddit and OpenAI was led by OpenAI's Chief Operating Officer Brad Lightcap and received approval from its independent directors, as stated in the joint statement released by both companies.

Following the announcement of the partnership, Reddit's shares surged, reaching as high as $64.75 in after-hours trading. This increase came after a 5.5% decline in regular New York trading on Thursday, where the stock closed at $56.38. Since its initial public offering, Reddit's stock has seen a 66% gain.