Reddit Stock Price Soars Owing to Alliance with OpenAI on ChatGPT

Reddit shares surged over 10% after announcing a partnership with OpenAI to provide data for training AI models and integrate ChatGPT features, amid legal battles over AI firms' use of copyrighted content.

Shares of social media platform Reddit had a double-digit surge on Friday when the company announced a new partnership deal with artificial intelligence firm OpenAI, the creators of the ChatGPT instant messaging robot.

Under the agreement, OpenAI is to gain access to large amounts of data produced by Reddit users and use it in its AI model development. In return for this, Reddit will implement AI-powered features from OpenAI into its platform and communities, involving the likes of ChatGPT.

The deal manifests Reddit's initiatives to diversify its avenues of revenue beyond advertising by exploiting the vibrant AI market. Besides that, it also marks a new phase of the ongoing court cases regarding whether AI companies like OpenAI have the right to train their systems without paying royalties for the copyrighted material.

This very week, a music powerhouse, Sony asked these companies: OpenAI, Google, and Microsoft, for information if their AI models were trained using Sony's copyright-protected music catalog. Several authors and publishers including The New York Times have lodged complaints against AI companies claiming copyright infringement. Some of these companies are imitating the written work of authors and thereby infringing their copyright.

The process, however, is a continuous one, and AI firms are quickly entering into data partnerships in a bid to get sufficient training materials for their models that are always consuming more data. OpenAI, within the last few months, got deals with the Associated Press, Financial Times, and now Reddit. 

In addition to the reveals on Reddit, OpenAI has launched GPT-4, the latest version of the AI language model that drives ChatGPT. The new release incorporates higher speeds of processing, a multitude of capabilities to analyze images and audio, enhanced coherence and memory, as well as language translation capabilities.

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As the AI revolution marches ahead, we can see how business entities are in charge of their intellectual property rights within this complex setting. Reddit's stock jump indicates that the market believes that the platform's partnership with OpenAI will pay up in the field of AI.