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Reddit shares surge on OpenAI deal to add content to ChatGPT

Published 17/05/2024, 09:38 am
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Investing.com-- OpenAI and Reddit Inc (NYSE:RDDT) announced a new partnership on Thursday, under which content from the social media platform will be added to ChatGPT and other artificial intelligence products from the AI major. 

The deal saw Reddit’s shares surge 11.5% in aftermarket trade to about $62.75.  

Under the agreement, OpenAI wil access Reddit’s data API. Reddit will also incorporate new AI features for users and mods, OpenAI and Reddit said in an announcement. 

The two will also collaborate on advertising. 

The deal comes just a few months after Reddit partnered with Alphabet Inc's (NASDAQ:GOOGL) Google, under which the latter also gained access to the social network’s data for its AI products. 

Reddit, which went public earlier this year, surprised investors with stronger-than-expected first quarter earnings, as it benefited from its AI tie-ups and advertising deals. 

The site has seen increasing popularity in recent years as a medium for discussion and as an archive of information on the internet. Several analysts have noted the value Reddit’s data has in potentially training AI models. 

The meme stock phenomenon of 2021 played a key role in Reddit’s booming popularity, given that the retail frenzy that drove up the prices of GameStop Corp (NYSE:GME) and AMC Entertainment Holdings Inc (NYSE:AMC) largely originated on Reddit’s r/wallstreetbets forum. 

OpenAI CEO Sam Altman is a shareholder in Reddit and was on its board until 2022.

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