The trading floor of the New York Stock Exchange is preparing for an initial public offering of social media platform Reddit on March 21, 2024 in New York City.
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Reddit shares rose 11% in extended trading Thursday after the social media giant announced a partnership with OpenAI that will allow the ChatGPT maker to train its artificial intelligence models on Reddit content.
As part of the deal, OpenAI will gain access to Reddit's data application programming interface, or API, “which provides real-time, structured and unique content from Reddit,” according to a release.
In exchange, Reddit will begin offering some AI features to users and moderators, powered by OpenAI, which will also become a Reddit advertising partner. Google announced a similar partnership with Reddit in February, allowing the company to train its AI models, such as Gemini, on Reddit content through access to the platform's API.
“Reddit has become one of the Internet's largest open archives for authentic, relevant, and always up-to-date human conversations about anything and everything,” CEO Steve Huffman said in Thursday's release. ” “Adding it to ChatGPT continues our belief in a connected Internet, helping people find more or what they're looking for, and helping new audiences find community on Reddit.”
OpenAI CEO Sam Altman is a former board member and major shareholder in Reddit, with shares worth about $750 million after Thursday's pop. OpenAI Chief Operating Officer Brad Lightcap spearheaded the deal, which was approved by the company's board.
Earlier this week, OpenAI launched a new AI model and desktop version of ChatGPT, with an updated user interface, the company's latest effort to expand the use of its popular chatbot. The update brings GPT-4 to everyone, including free users of OpenAI, Chief Technology Officer Meera Murthy said in a live stream event on Monday.
Murthy said the new model, the GPT-4o, is “much faster” with better capabilities in text, video and audio. OpenAI said it plans to eventually allow users to video chat with ChatGPT.
For Reddit, the deal provides another spark after a rally on Monday and Tuesday linked to a broad rally in so-called meme stocks like GameStop. Reddit, which went public in March and hit a record high just days after its initial public offering, is back to trading near a high of $65.11.
Watch: OpenAI's co-founder and chief scientist are leaving the company.