Reddit shares surge as OpenAI content deal confirmed - NZ Herald
The agreement gives OpenAI access to content on Reddit’s website and will allow the social media platform to embed more AI tools. Photo / AP
Deal with OpenAI
OpenAI has struck a deal with Reddit to use content from the social media platform for its artificial intelligence chatbot, sending shares in the company up as much as 15 per cent in after-hours trading.
Thursday’s announcement (Friday NZT) is the latest in a number of deals between the Microsoft-backed start-up and media brands as the competition for high-quality and reliable data to underpin powerful new AI models intensifies.
The agreement gives OpenAI access to content on Reddit’s website and will allow the social media platform to embed more AI tools.
Financial Implications
Financial terms were not disclosed, but a jump in Reddit’s stock would mean a windfall for Sam Altman, the co-founder and chief executive of OpenAI, who has invested tens of millions of dollars into the social media group.
Altman, who has said he has no equity stake in OpenAI, held close to 10 per cent of Reddit’s stock ahead of its public listing in March via various entities, according to public filings.
Impact on Reddit
The deal will also be a boon to Reddit’s monetisation efforts, which have until now mainly focused on building up its advertising-based business model. Reddit told investors it also hoped to see a windfall from selling its data to third parties so that they could train their AI.
OpenAI has struck a series of deals with publishers this year, including the Financial Times, US-based Associated Press, Germany’s Axel Springer, France’s Le Monde and Spain’s Prisa Media. These deals provide access to material that can be used to develop and run generative AI technology.
Partnership with Reddit
OpenAI’s chief operating officer, Brad Lightcap, expressed excitement over the partnership with Reddit, aiming to enhance ChatGPT with timely and relevant information. Reddit’s co-founder and chief executive, Steve Huffman, also welcomed the collaboration to enrich the Reddit experience with AI-powered features.
Legal Disputes
While some media brands have partnered with OpenAI, others like The New York Times have resisted and instead sued the companies for copyright infringement.
Last month, eight regional US newspapers including the New York Daily News and Chicago Tribune also sued the companies for copyright infringement.
Monetisation Efforts
Social media platforms have been exploring ways to monetise their valuable data amid the AI boom. Meta’s AI model Llama 3 and Reddit's decision to charge third parties for data have stirred discussions in the industry.
Elon Musk's X introduced a paywall for access to its data, prompting varied responses from developers, indicating the evolving landscape of AI and data accessibility.
