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Shares of Reddit surged following the announcement of a partnership with OpenAI for AI training models.

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Shares of Reddit surged following the announcement of a partnership with OpenAI for AI training models. Reddit shares surged 11% in extended trading on Thursday after the social media company announced a partnership with OpenAI that will allow the ChatGPT maker to train its artificial intelligence models on Reddit content. As part of the deal, OpenAI will gain access to Reddit’s Data application programming interface, or API, “which provides real-time, structured, and unique content from Reddit,” according to a release. In exchange, Reddit will begin offering certain AI features to users and moderators, powered by OpenAI, which will also become a Reddit advertising partner. Google announced a similar partnership with Reddit in February, allowing the company to train its AI models, such as Gemini, on Reddit content via access to the platform’s API.

OpenAI CEO Sam Altman, a former board member and major shareholder in Reddit, has a stake valued at about $750 million after Thursday’s surge. OpenAI’s Chief Operating Officer Brad Lightcap spearheaded the deal, which was approved by the company’s board, as stated in the release. Earlier this week, OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface, to expand the use of its popular chatbot. The update introduces GPT-4, with enhanced capabilities in text, video, and audio, as well as plans to allow users to video chat with ChatGPT in the future.

CEO Steve Huffman highlighted the importance of integrating Reddit content into ChatGPT, emphasizing the platform as a rich source of authentic and up-to-date conversations. Reddit’s recent rally, influenced by meme stock surges, has seen the company trading near its high of $65.11 after its initial public offering in March. OpenAI’s continuous efforts to innovate its AI systems and enhance user experience are reflected in the introduction of GPT-4o, a faster model with improved features. The collaboration between Reddit and OpenAI marks a significant step towards leveraging AI for enhanced user engagement and advertising opportunities.

For Reddit, the partnership with OpenAI signifies a strategic move to enhance its AI capabilities and offer more advanced features to its user base. The access to OpenAI’s technology will enable Reddit to further enrich the user experience and provide new avenues for engagement on the platform. With both companies holding a strong position in their respective fields, the partnership is expected to drive innovation and growth in the AI and social media sectors. Overall, the collaboration between Reddit and OpenAI signals a promising future for AI-driven content and services on the platform.

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