Reddit Stock Jumps 11% After Securing OpenAI Content Licensing Deal
Reddit shares surge 11% in extended trading after the social media company signs a partnership allowing OpenAI to train its AI models on Reddit content.
Reddit shares surge 11% in extended trading after the social media company announces a major partnership with OpenAI. The deal allows the ChatGPT maker to train its artificial intelligence models on Reddit content by accessing the platform's Data API. This API provides OpenAI with real-time, structured, and unique content drawn directly from Reddit's vast network of online communities.
In exchange for providing this valuable training data, Reddit gains the ability to offer AI-powered features to its users and moderators. OpenAI also becomes an official advertising partner on the social media platform, adding a new revenue stream. This arrangement mirrors a similar data-sharing agreement Reddit secures with Google earlier in February.
The partnership highlights the growing importance of human-generated data for AI development, with CEO Steve Huffman describing Reddit as one of the internet's largest archives of authentic conversations. Notably, OpenAI CEO Sam Altman holds a significant stake in Reddit, valued at roughly $750 million following the stock price jump. The news comes just days after OpenAI launches its latest, faster GPT-4o model.