Reddit Shares Rise as it Inks Content Deal with OpenAI - Latest Global News

Reddit Shares Rise as it Inks Content Deal with OpenAI

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OpenAI has struck a deal with Reddit to use the social media platform’s content for its artificial intelligence chatbot, sending the company’s shares up as much as 15 percent in after-hours trading.

Thursday’s announcement is the latest in a series of deals between the Microsoft-backed startup and media brands, as competition for high-quality, reliable data to power powerful new AI models intensifies. At the same time, OpenAI is fighting copyright lawsuits from publishers who are reluctant to allow the ChatGPT manufacturer to use their content.

The agreement gives OpenAI access to content on Reddit’s website and allows the social media platform to embed other AI tools.

Financial details were not disclosed, but a rise in Reddit’s stock would represent a windfall for Sam Altman, the co-founder and chief executive of OpenAI, who has invested tens of millions of dollars in the social media group.

According to public filings, Altman, who said he had no equity stake in OpenAI, owned nearly 10 percent of Reddit’s stock through various companies before its March listing. The 39-year-old, a serial entrepreneur and investor, did not lead the negotiations with Reddit, according to OpenAI.

The deal will also be a boon for Reddit’s monetization efforts, which have so far focused primarily on building its ad-based business model. At its pre-listing roadshow, Reddit told investors that it also hoped to make a profit by selling its data to third parties so they could train their AI. It already has deals with Google and Cision.

OpenAI has signed a number of deals this year with publishers including the Financial Times, the US Associated Press, Germany’s Axel Springer, France’s Le Monde and Spain’s Prisa Media. These deals give the San Francisco-based startup access to material that can in turn be used to develop and run generative AI technology that can create text, images and code from human input.

“We are excited to work with Reddit to expand ChatGPT with uniquely timely and relevant information and explore opportunities to enrich the Reddit experience with AI-powered features,” said Brad Lightcap, Chief Operating Officer of OpenAI.

Adding Reddit to ChatGPT “solidifies our belief in a connected internet, helping people find more or what they’re looking for, and helping new audiences find community on Reddit,” said Steve Huffman, co-founder and CEO of Reddit.

While some media brands have partnered with OpenAI, others have resisted. The New York Times and other publishers have instead sued OpenAI and Microsoft over the collection of their articles. In December, the NYT filed a lawsuit seeking billions of dollars in damages from the two companies for “profit.”[ing] of the Times’ massive copyright infringement, commercial exploitation and misappropriation of its intellectual property.”

OpenAI has claimed the lawsuit is “meritless.”

Last month, eight regional U.S. newspapers, including the New York Daily News and the Chicago Tribune, also sued the companies for copyright infringement.

With the advent of the AI ​​boom, social media platforms are increasingly looking for ways to monetize their valuable data.

Meta’s Llama 3 AI model, which powers the virtual assistant feature, is open source, meaning developers can use it to create products easily and for free. However, large cloud companies such as Apple and Google are charged for training their models on the system. Under Elon Musk,

At Reddit, the decision to charge third parties for data has angered long-ruling users, who were embroiled in a standoff with the company in June after moderators in charge of more than 8,000 forums blocked access to their content or restrict.

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