Reddit Signs Content Deal with OpenAI...Stock Soars Over 10%

Reddit, a major online community in the United States, has signed a partnership with OpenAI, the developer of 'ChatGPT,' including the use of content. Reddit's stock price soared more than 10% in after-hours trading.

[Image source=Reuters Yonhap News]

On the 16th (local time), Reddit and OpenAI announced the partnership through a joint press release. Accordingly, OpenAI will utilize Reddit's content in its products, including ChatGPT. AI tools based on OpenAI models will also be supported on the Reddit platform. Additionally, OpenAI will become an advertising partner of Reddit.

Brad Lightcap, Chief Operating Officer (COO) of OpenAI, who led this partnership, stated, "Through collaboration with Reddit, we can enhance ChatGPT with timely and relevant information." Steve Huffman, co-founder and CEO of Reddit, also said, "Reddit is one of the largest public archives on the internet," adding, "Connecting with ChatGPT will help people find more of what they want."

With 73 million daily users, Reddit had already signed an AI content license agreement with Google Alphabet before OpenAI. At its IPO in March, the company emphasized a strategy to increase profitability by selling subscriber data and content to AI companies. OpenAI is also expanding partnerships with media companies such as online information site Dotdash, news agency AP, and financial newspaper Financial Times (FT) to secure content.

In particular, this partnership is seen as a virtually anticipated step since Sam Altman, CEO of OpenAI, is one of Reddit's major shareholders. Altman, who once served as Reddit's interim CEO, is a key shareholder holding the largest stake after Advance Magazine Publishers and China's Tencent. However, major foreign media added that Altman did not take part in the process of establishing this partnership.

On the day, Reddit's stock price surged after the partnership news was announced on the New York Stock Exchange. Reddit closed the regular session up over 5% and is currently trading above $62 per share, up more than 10% in after-hours trading.