Reddit (RDDT.N) has teamed up with OpenAI to integrate its content into the popular chatbot ChatGPT, the companies announced on Thursday. This collaboration has propelled the social media platform’s shares up by 12% in after-hours trading.
This partnership highlights Reddit’s efforts to expand its offerings beyond its core advertising business, following its recent collaboration with Alphabet (GOOGL.O) to provide its content for training Google’s AI models.
ChatGPT and other OpenAI products will leverage Reddit’s application programming interface (API) to access its content, facilitated by this new partnership.
Additionally, OpenAI will become an advertising partner for Reddit, according to statements from the company.
Before Reddit’s IPO in March, Reuters reported that Reddit had finalized a deal with Alphabet worth approximately $60 million annually.
Investors perceive selling its data for training AI models as a significant revenue stream beyond Reddit’s advertising endeavors.
Earlier this month, Reddit reported robust revenue growth and improved profitability in its first earnings report since going public, indicating that its collaboration with Google and efforts to enhance its advertising business were yielding positive results.
Following the announcement, Reddit’s shares surged by 10.5% to reach $62.31 in after-hours trading. Since its market debut in March, the stock has experienced a nearly 12% increase as of Wednesday’s closing.
