OpenAI's New Deal Sees the ChatGPT Trailblazer Following a Competitor's Lead

The gates of Reddit are now open to ChatGPT.

Reddit and ChatGPT-maker OpenAI entered a new partnership on Thursday that brings more advertising dollars and AI tools to Reddit in exchange for Reddit posts.

Reddit stock rose 13% on Friday following the announcement.

OpenAI will use real-time data from Reddit users to train ChatGPT and its new product offerings. Finding fresh training sources for AI has been one of the technology‘s challenges; in recent months, OpenAI has inked deals with publishers like the Financial Times and Axel Springer to access troves of data for ChatGPT.

Related: OpenAI Can Now Access Financial Times Articles to Train AI

On the Reddit side, the company will use OpenAI’s platform to bring new AI features to its community. Organic Reddit traffic has grown from 160 million clicks in August 2023 to 480 million in February of this year, according to Ahrefs data.

OpenAI will also advertise on Reddit, adding to the platform’s revenue.

The two companies did not disclose the deal’s financial terms, but Reddit entered an AI licensing deal with Google in February for a reported $60 million per year.

The difference between the two deals is that OpenAI’s CEO, Sam Altman, has more of a stake in Reddit than even its CEO. Altman is Reddit’s third-biggest shareholder; he owns more shares than Reddit CEO Steve Huffman (8.7% of the stock to Huffman’s 3.3%).

Related: Who Is OpenAI CEO Sam Altman? Net Worth, Education 1715968565 Sam Altman GettyImages 1841164625

OpenAI CEO Sam Altman. Photographer: Dustin Chambers/Bloomberg via Getty Images

OpenAI disclosed the connection between Altman and Reddit in its deal announcement post, writing that it “was led by OpenAI’s COO and approved by its independent Board of Directors.”

Related: Site Traffic Down? Here Are the Big AI Changes Google Made to Its Search Tool

With the new Reddit deal, OpenAI is also treading on training territory already claimed by rival AI-maker Google.

OpenAI kept Google on its toes this week by surprise-announcing a new AI model one day before Google’s annual I/O conference.

The rivalry between the two companies came out into the open on Thursday on X. OpenAI CEO Sam Altman drew attention to “the aesthetic difference” between the settings that OpenAI and Google chose to announce their new AI models, and a Google engineer responded, “Interesting how all your launches are timed with ours then.”

OpenAI is reportedly making a web search engine product to further challenge Google.

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