Reddit Shares Rally Following OpenAI Deal to Share Training Data 

Reddit Inc. stock (RDDT) rallied 14% following a deal with ChatGPT-maker OpenAI to share data to train artificial intelligence. The MarketWatch data shows that after-hours trading had the shares rise to test $64.22, a remarkable rebound from the 5.5% slip at the close.

Reddit Stock (RDDT) Bullish Following Deal with OpenAI

Reddit stock regained the bullish steam following news that the Sam Altman-led AI giant will utilize authentic content shared by the social discussion platform in training AI models. 

The data-sharing deal had the two companies convey the announcement jointly on Thursday, May 16. Reddit profiled it as an essential internet-based conversation space that will help expand the material range that the Microsoft-backed OpenAI will utilize in training its large language model (LLM). 

The New York-listed RDDT stock spiked as it revealed the agreement will bolster the user experience. The company explained that the OpenAI partnership will help onboard AI-powered features to the Redditors and mods. 

The partnership will enable OpenAI to realize enhanced understanding and illustration of Reddit content, particularly on recent topics. The announcement prompted several critics to predict that the content from the social discussion platform would worsen the AI bias.

The announcement fueled the uptrend in Reddit (RDDT) shares by over 14% after-hours trading. While the frenzy has cooled off, MarketWatch data shows that RDDT is 11.74% up to exchange hands at $63.00 after-hours, trading from the 5.45% slip to close at $56.38.  

Reddit shares began trading on the New York Stock Exchange (NYSE) on March 21. A footnote captured on the blog post announcing the deal reveals that OpenAI chief Sam Altman has a shareholding in Reddit. 

The ChatGPT creator noted that its chief operating executive, Brad Lightcap, spearheaded the agreement. The post revealed that the independent board of directors approved the data-sharing agreement. 

Reddit chief executive Steve Huffman revealed in a subsequent statement that the platform possesses one of the leading open archives of relevant, up-to-date and authentic human conversations regarding prevailing data.

Reddit Content Inclusion in ChatGPT

Huffman hailed the inclusion of Reddit within the ChatGPT, which upholds the company’s belief in facilitating a connected internet. The deal will enable individuals to find relevant information with the new audiences identifying a community on Reddit. 

Reddit indicated that the deal allows the Altman-led team to pull the content into the ChatGPT and other products by leveraging the Data API. Reddit will benefit from the capability to develop AI features by tapping OpenAI’s technology. 

Meanwhile, OpenAI is to become the Reddit advertising partner. Lightcap was delighted to partner with Reddit as it will enhance ChatGPT through access to timely and relevant information. 

Lightcap added that the partnership presents an opportunity to explore viable alternatives to enriching Reddit’s user experience with AI-powered features. 

The Reddit-OpenAI deal came after the Altman-led firm and Google announced high-profile updates regarding their respective AI tools. 

The week has seen an accelerated activity from OpenAI that, on Monday, May 13, unveiled updates to the ChatGPT that featured the GPT-4o model. 

Hours later, during the Google I/O annual event, Google highlighted several AI-powered features that had been added to the Gemini brand. The Sundar Pichai-led Google utilized the Tuesday event to announce the expansion of features for its workplace tools suite. 

Google-Reddit Deal Faces FTC Scrutiny

The OpenAI data sharing one is hardly the first as Reddit had in February inked an agreement with Google, allowing it access to the extensive library of content.  The partnership, however, attracted attention and investigation from the US Federal Trade Commission (FTC) to avert monopolizing the segment. 

Reddit in March illustrates that the FTC agents are undertaking non-public inquiries on the sale, licensing, and sharing of user-generated content with other parties to train AI models. The filing to the Securities and Exchange Commission (SEC) ruled out Reddit was engaging in deceptive and unfair trade practices. 

The news of the Reddit-OpenAI deal drew criticism across social media, with several users alleging the existence of more provocative and controversial communities on the platform. 

Trustswap chief Jeff Kirdeikis profiled the Reddit hivemind as dominated by unemployed socialists and basement-dwellers. The executive warned that the deal could plunge OpenAI into further bias, 

Technology scholar Paul Couvert hailed the deal as the search will feature the Reddit filter. Entrepreneur Che Rodney warned of looming disaster, alleging misinformation and bias were inevitable.

AI Firms Accused of Unauthorized Usage of Copyrighted Content

The Reddit-OpenAI deal coincides with several parties levelling charges alleging that AI firms are illegally acquiring data-gathering methods to harvest input for training models. The suits allege that AI firms stole copyrighted content and infringed privacy. 

Earlier on Thursday, May 16, the world’s leading music publisher dispatched letters to 700 firms, among them OpenAI, Google and Microsoft, alleging they made unauthorized usage of the music content in training their models. 

Editorial credit: Ink Drop / Shutterstock.com

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