OpenAI Strikes Deal with Reddit to Use Its Content for ChatGPT Training

• Reddit and OpenAI have finalized a deal whereby Reddit's content will be available for ChatGPT, and OpenAI will act as an advertising partner for Reddit.
• Apparently, Reddit has agreed to this arrangement in order to diversify its revenue streams. However, the financial terms have not been disclosed.
• This won't be the first time CEO Sam Altman will be working with Reddit. He served as an interim CEO of the company in 2014 and was a member of Reddit's board up until 2021.

Reddit has struck a partnership with OpenAI, as part of which it will make Reddit data available for training ChatGPT. Additionally, OpenAI will become Reddit's new advertising partner. The financial terms of the deal haven't been made public, though.

As a result of these announcements, Reddit's shares have increased by over 13% from yesterday's close i.e. from $56.38 to around $64.00 at the time of writing.

The partnership is being led by OpenAI's chief operating officer Brad Lightcap, and it has already been approved by all independent directors of the company.

We are thrilled to partner with Reddit to enhance ChatGPT with uniquely timely and relevant information, and to explore the possibilities to enrich the Reddit experience with AI-powered features." - OpenAI COO

It's worth noting that this won't be the first time OpenAI CEO Sam Altman will be working with Reddit. In 2014, he served as the company's interim CEO. Plus, up until 2021, Altman was a part of Reddit's board-he only stepped down to focus more on his own company OpenAI.

Reasons behind the OpenAI-Reddit Deal

Reddit is trying to diversify its revenue streams so that it doesn't have to completely rely on advertisements. Before Reddit's IPO went live, Reddit made it very clear in its pitch that money-making and finding new streams of revenue would be a priority for the company moving forward.

For the same reason, Reddit also struck a deal with Google earlier this year worth $60 million/year. Under this deal, too, Reddit promised to supply the tech giant with data to train Google's AI models. Check out Google's latest AI updates in my in-depth coverage of the Google I/O conference.

Including it (Reddit) in ChatGPT upholds our belief in a connected internet, helps people find more or what they're looking for, and helps new audiences find community on Reddit." - Steve Huffman, co-founder and CEO of Reddit

Note: In the first quarter of 2024, Reddit reported amazing revenue growth and profitability. This goes on to show that its move to partner with Google has been paying off. Perhaps it's reapplying a tried-and-tested formula with OpenAI now?

Read more: Reddit receives an inquiry request from FTC about its AI-related deals

What's in it for OpenAI?

OpenAI is an AI platform, meaning it will almost always be in need of more content to train its AI models-and there's no better way to gain access to real users and their thoughts than a platform like Reddit.

The social media platform has over 2.3 billion monthly active users. Plus, unlike other social media giants like Instagram and TikTok, Reddit is mostly text-based, meaning users there have real conversations and discussions with each other, which can be picked up by OpenAI.

This isn't something new on OpenAI's part, though. It has been partnering with content platforms for quite some time now to ensure its AI tools stay atop the mountain. For example, it teamed up with Investopedia-owner Dotdash Meredith earlier this month and the Financial Times in April.

However, is Reddit the greatest dataset for training AI models? Nope. After all, it's flooded with inside jokes, memes, and a lot of wrong information. Given that AI chatbots are already pretty racist despite multiple anti-racism training, will they be able to handle Reddit's dark humor"? Only time will tell. But these are some challenges OpenAI will have to deal with.

Also, while some of OpenAI's partnerships for data sharing are as legitimate as this one, some are rather unscrupulous. For instance, OpenAI is facing a lawsuit from the New York Times and 8 other US newspapers for copyright infringement. With all that said, though, it can be appreciated that the company is conducting business the right way this time.

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