After striking a data-sharing deal with OpenAI, the creator of the AI chatbot ChatGPT, Reddit saw an 11% surge in its stock during after-hours trading. The agreement, announced on May 16, involves Reddit providing OpenAI with access to its data application programming interface (API), which will enable real-time content from Reddit posts to be integrated into ChatGPT and other new products. In return, OpenAI will offer Reddit users and moderators a range of AI-powered features designed to enhance user engagement. Reddit also announced OpenAI as its latest advertising partner. Despite experiencing a 5.45% decline on May 16, Reddit’s stock rebounded by 11.05% to reach $62.61 in after-hours trading, according to Google Finance.
This partnership follows a similar agreement Reddit signed with Google in February, reportedly worth $60 million. As part of its ongoing efforts to bolster community engagement and diversify revenue streams beyond advertising, Reddit continues to explore strategic alliances. However, OpenAI and other AI firms are currently facing legal challenges related to their data-gathering methods for training AI models. Several lawsuits have accused these companies of unlawfully stealing copyrighted content and private information. On May 16, Sony, the world’s largest music publisher, sent letters to more than 700 firms, including OpenAI, Microsoft, and Google, expressing concerns about potential “unauthorized uses” of its music in training AI models.
It is worth noting that Reddit previously operated a blockchain-based rewards service called Community Points, but it was shut down in October due to scalability issues. In February, Reddit disclosed that it held Bitcoin (BTC) and Ether (ETH) in its cash reserves. Additionally, the platform allows users to make payments in Ether and Polygon’s (MATIC) for certain virtual items. The story of Polygon’s Sandeep Nailwal, who went from rags to riches, is featured in the magazine article titled “Slumdog billionaire.”