Reddit Stock Price Jumps After OpenAI Data-Sharing Deal

2024-05-17 04:01:08

Harvey Hunter

Last updated:

May 17, 2024 08:01 EDT | 2 min read

Reddit Stock Price Jumps After OpenAI Data-Sharing Deal Social media firm Reddit’s stock rose 13.5% after a data-sharing deal with OpenAI, the creator of the artificial intelligence (AI) chatbot ChatGPT.

On May 16th, Reddit announced its partnership with OpenAI. This deal grants OpenAI access to Reddit’s data application programming interface (API), providing real-time content from platform posts.

Reddit said this would “bring Reddit content to ChatGPT and new products.” Open AI COO Brad Lightcap said the venture will “explore the possibilities to enrich the Reddit experience with AI-powered features.”

The announcement also mentioned ChatGPT as the newest advertising partner of Reddit.

Following the announcement, Reddit stock saw a 5.45% decline, but in the pre-market, the site gained 13.78% to $64.15, as per Google Finance data.

Reddit’s 24-hour share price. Source: Google Finance

What OpenAI Brings to Reddit

Reddit has long been focused on finding ways to strengthen community engagement and develop revenue streams outside of offering advertising space.

OpenAI will give Reddit users and moderators a suite of new AI-powered features aimed at strengthening user engagement.

Using Reddit’s data API provides OpenAI with real-time, structured, and unique content from Reddit. AI tools can then apply this data to showcase more relevant Reddit content, especially on recent topics. Reddit CEO Steve Huffman commented:

“ChatGPT upholds our belief in a connected internet, helps people find more of what they’re looking for, and helps new audiences find community on Reddit.”

This partnership benefits OpenAI products by allowing access to Reddit’s API. Products like ChatGPT will gain up-to-date and relevant information, a previous limitation. Huffman added:

“Reddit has become one of the internet’s largest open archives of authentic, relevant, and always up-to-date human conversations about anything and everything.”

Reddit highlighted that this integration would not compromise privacy. Their Public Content Policy emphasizes user privacy and content protection.

The policy aims for complete transparency to “give communities, developers, and researchers a better sense of how Reddit thinks about access to public content and the protections that should exist for users.”

Rising AI Adoption

In recent years AI has seen significant adoption. AI cryptocurrencies rose an average of 257.2% in the first 2 months of 2024. This came with rising interest among major jurisdictions.

One of the leaders in this is the US. On May 15th, US senators proposed a $32 Billion Investment Plan to Boost AI development in the US over the next 3 years. This came to seize the opportunity to “harness the opportunities and address the risks” of the rapidly developing technology.

This development has given birth to a range of promising projects with real-world applications.

There have also been efforts to regulate AI. The European Union has again set a global precedent by unanimously passing The AI Act, legislation to govern AI.

The Act brings a targeted regulatory approach to some of the most pressing issues and anxieties around AI today. It crosses a crucial boundary, providing clarity and confidence.

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