Reddit Shares surged by 11% during after-hours trading on May 16th, following the announcement of a strategic data-sharing partnership with OpenAI, the company behind the revolutionary artificial intelligence (AI) chatbot ChatGPT.
According to Reddit, the agreement allows OpenAI’s tools to better comprehend and display Reddit content, while the AI company supports the introduction of new features on the social platform.
On May 16, Reddit revealed its plans to grant OpenAI access to its data application programming interface (API), thereby enabling real-time integration of content from posts on the platform into OpenAI’s existing and upcoming products.
Reddit stated that this partnership will facilitate the integration of Reddit content into ChatGPT and other OpenAI products.
In return for accessing Reddit’s Data API, OpenAI pledged to provide Reddit users and moderators with a range of innovative AI-powered tools, specifically designed to bolster user engagement on the platform.
Reddit has designated OpenAI as its latest advertising partner, further solidifying the alliance between the two companies as part of their recent collaboration.
Despite experiencing a 5.45% decline during the trading day on May 16, Reddit’s stock rebounded significantly in after-hours trading, with shares soaring 11.05% to $62.61, as reported by Google Finance.
Reddit has focused on boosting community engagement and generating revenue through methods other than selling advertising space for quite some time.
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This agreement comes as OpenAI and other AI companies encounter increasing legal challenges regarding their data-gathering practices for model training. Lawsuits claim that these firms unlawfully appropriated copyrighted content and personal information.
On May 16, Sony, the world’s leading music publisher, initiated a proactive measure to protect its intellectual property by sending letters to more than 700 companies, including AI developers such as OpenAI, Microsoft, and Google. According to multiple reports, Sony stated that it has “reason to believe” these firms may have engaged in “unauthorized uses” of its music catalog for training their AI models.
Reddit previously operated a blockchain-based rewards system called Community Points, which was designed to incentivize user engagement and contributions within subreddits. However, the firm decided to discontinue this service last October, citing concerns related to its scalability and overall effectiveness.
In February, Reddit revealed its holdings of Bitcoin and Ether as part of its cash reserves, demonstrating the platform’s increasing interest in the cryptocurrency space. Furthermore, Reddit has enabled users to make payments for certain virtual items using Ether and Polygon’s MATIC token.
