Reddit Inc. has recently partnered with OpenAI, a leading artificial intelligence company, to bring its content to the chatbot ChatGPT and other products. This partnership will also help Reddit add new AI features to its forums. Shares of Reddit saw a significant increase of up to 15% in late trading following the announcement of this partnership. The agreement with OpenAI will allow their AI tools to better understand and showcase Reddit content, especially on recent topics. OpenAI will be able to display Reddit’s content and train AI systems using the data from Reddit.
In addition to showcasing Reddit content, the partnership will also lead to the development of new AI-based tools for Reddit users, based on models created by OpenAI. OpenAI will also be placing ads on Reddit’s platform as part of the agreement. While the financial terms of the deal were not disclosed, it is clear that both companies stand to benefit from this collaboration. Reddit’s content has long been used as a valuable source of training data for AI models, including those developed by OpenAI. With the release of new data policies last week, Reddit is aiming to increase revenue through licensing agreements with AI developers and other companies.
Finding new revenue streams was a key focus for Reddit leading up to its initial public offering earlier this year. The company has been actively seeking partnerships and licensing deals to monetize its valuable data. In addition to the OpenAI partnership, Reddit also signed a $60 million deal with Google in January to help train large language models. The terms of these deals typically govern how Reddit’s content can be used by the partners, including how long a Reddit summary can appear in a Google search or whether the licensee must display Reddit branding in AI-generated results. Overall, Reddit has signed licensing deals worth $203 million in total, with terms ranging from two to three years.
CEO Steve Huffman has emphasized the value of Reddit’s data and the growing interest in leveraging it for AI development. The partnership with OpenAI is a testament to Reddit’s commitment to advancing AI technology and providing innovative tools for its users. By collaborating with leading AI companies like OpenAI and Google, Reddit is positioning itself as a key player in the AI ecosystem. The company’s willingness to explore new partnerships and revenue streams highlights its strategic vision for growth and innovation in the rapidly evolving tech industry.
