OpenAI and Reddit Announce Partnership

OpenAI and Reddit Inc (NYSE:RDDT) revealed a new collaboration on Thursday, marking a significant partnership that will integrate content from the social media platform into OpenAI's artificial intelligence products, including ChatGPT.

The announcement of the partnership led to a notable surge in Reddit's shares, which climbed by 11.5% in aftermarket trading to approximately $62.75.

As part of the agreement, OpenAI will gain access to Reddit's data API, enabling the integration of Reddit's vast content into its AI products. Additionally, Reddit will implement new AI features for its users and moderators, enhancing the overall experience on the platform.

Moreover, the collaboration extends to advertising, with both companies planning to work together on advertising initiatives.

This partnership follows Reddit's recent collaboration with Alphabet Inc's (NASDAQ:GOOGL) Google, where Google also obtained access to Reddit's data for its own AI products.

Reddit, which went public earlier this year, surprised investors with stronger-than-expected first-quarter earnings, attributed in part to its AI partnerships and advertising agreements. The platform's increasing popularity as a hub for discussions and an information repository on the internet has drawn attention from analysts, who recognize the value of Reddit's data for training AI models.

The phenomenon of meme stocks in 2021, particularly driven by the r/wallstreetbets forum on Reddit, played a significant role in boosting Reddit's popularity. This trend underscored the platform's influence and community-driven nature.

It's worth noting that OpenAI CEO Sam Altman is a shareholder in Reddit and was a member of its board until 2022.

Explore more about Reddit's financial score with Financial Score API.