Reddit shares climb on ChatGPT deal with OpenAI

By James Rogers

The partnership will bring Reddit's content to OpenAI's ChatGPT

Shares of Reddit Inc. rose about 12% in extended trading Thursday after the social-media platform announced a partnership with OpenAI.

The deal will bring Reddit (RDDT) content to OpenAI's ChatGPT and gives OpenAI access to Reddit's Data API. "This will enable OpenAI's AI tools to better understand and showcase Reddit content, especially on recent topics," Reddit said in a blog post.

As part of the partnership, Reddit will also bring new AI-powered features to Reddit's users and moderators. Additionally, OpenAI will become a Reddit advertising partner.

Related: Reddit shares soar on revenue beat, narrower-than-expected loss in first post-IPO results

Reddit counts OpenAI Chief Executive Sam Altman among its investors. The social-media platform recently announced its first quarterly results as a public company, reporting a revenue beat and a narrower-than-expected loss.

The company is no stranger to high-profile partnerships. Speaking during the first-quarter conference call last week, Reddit CEO Steve Huffman said that the company's "still nascent" data-licensing business continued to grow and evolve. The CEO also pointed to Reddit's deal with Alphabet Inc.'s (GOOGL) (GOOG) Google. The two companies have a longstanding relationship, and the Google deal, which is said to be worth $60 million a year, was deepened in February with a new cloud partnership.

Reddit shares, which ended Thursday's session down 5.5%, are up 11.8% since the company's IPO in March.

Related: OpenAI launches new 'flagship' GPT-4o model, touting improved speed and performance

Earlier this week, OpenAI unveiled GPT-4o, the privately-held company's latest flagship artificial-intelligence model, which it said offers improvements in speed and performance.

-James Rogers

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05-16-24 2034ET

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