OpenAI teams up with Reddit to enhance ChatGPT experience

OpenAI is partnering with Reddit in a groundbreaking deal to bring its content to popular chatbot ChatGPT, the companies have said, sending the media platform's shares up 12 percent in extended trade.

The deal underscores Reddit's attempt to diversify beyond its advertising business, and follows its recent partnership with Alphabet to make its content available for training Google's AI models.

ChatGPT and other OpenAI products will use Reddit's application programming interface, the means by which Reddit distributes its content, following the new partnership.

OpenAI will also become a Reddit advertising partner, the company said.

Ahead of Reddit's March IPO, Reddit struck its deal with Alphabet, worth about $60 million per year.

The social media company earlier this month reported strong revenue growth and improving profitability in the first earnings since its market debut, indicating that its Google deal and its push to grow its ads business were paying off.

Reddit's shares rose 10.5 percent to $62.31 after the bell. As of Wednesday's close, the stock is up nearly 12 percent since its market debut in March.

OpenAI COO Brad Lightcap expressed excitement about enhancing ChatGPT with real-time information, while Reddit CEO Steve Huffman underscored the platform's role as a repository of authentic human conversations.

OpenAI CEO Sam Altman's involvement as a major Reddit shareholder adds depth to this strategic collaboration. He holds a significant 8.7 percent stake in Reddit.

OpenAI clarified in a disclosure that "Sam Altman is a Reddit shareholder. This collaboration was overseen by OpenAI's COO and endorsed by its independent Board of Directors."

Although the financial details of the agreement were not revealed, Reddit had previously disclosed a $203 million AI licensing deal, reportedly with Google to support its Gemini LLM training.