Reddit signs deal with OpenAI to open up the platform to ChatGPT

Reddit has confirmed a partnership cope with OpenAI to convey content material from the platform to ChatGPT, in a transfer that may additional diversify its revenue streams.

Following on from an analogous current settlement with Google price an estimated $60 million per yr, OpenAI shall be granted entry to Reddit’s Knowledge API “which offers real-time, structured, and distinctive content material from Reddit,” to transmit discussions from the positioning to ChatGPT.

In return, the social media web site will have the ability to roll out chosen AI options to customers and moderators, powered by OpenAI, which can now be an promoting associate on the platform.

Sam Altman, OpenAI CEO, is a former board member and present main shareholder in Reddit, along with his share worth hovering to $750 million after the post-deal rise on Thursday.

General, Reddit’s share value spiked by over 10% as the corporate strives towards its ambition to maneuver past promoting as its predominant income supply.

The San Francisco-based media firm combines components of social media, message boards and information aggregation. It was based in June 2005 by Steve Huffman and Alexis Ohanian who bought the platform to Condé Nast the next yr. Huffman departed the corporate in 2009 earlier than returning as CEO, in 2015, and at present holds the place.

Reddit and OpenAI at this time introduced a partnership to profit each the Reddit and OpenAI person communities in quite a lot of methods. Be taught extra on our company weblog. https://t.co/qah9TaRjVU

— Reddit (@Reddit) May 16, 2024

Reddit rings the adjustments to maneuver towards revenue

In a press release, Huffman mentioned, “(connecting Reddit to) ChatGPT upholds our perception in a linked web, helps individuals discover extra or what they’re searching for, and helps new audiences discover neighborhood on Reddit.”

He beforehand spoke of pending changes to usher within the AI period, however the Reddit neighborhood had expressed fears Large Tech giants comparable to Google and OpenAI had been utilizing Reddit’s scale and depth of detailed data on an enormous array of topics to mine the data for the good thing about its chatbots.

That has materialized, however the partnership will convey mutual advantages as a lot as it is going to additionally convey change to Reddit from a person perspective.

Traders have backed Reddit due to its willingness to commerce with its information. This was one of many most important drivers to create demand for shares when the corporate was floated on the New York Inventory Alternate with its March IPO. 

Final yr Reddit returned a web lack of $91 million, having by no means recorded a revenue since its inception.

Picture credit score: Ideogram