ChatGPT maker OpenAI has been signing exclusive partnerships with big companies at a dizzying pace, with more than 30 deals since 2021. The list includes Google, Microsoft, Salesforce, and media operations such as the Associated Press. But it’s the partnership announced in May with Reddit that grabbed the attention of Wharton marketing professor Pinar Yildirim, who studies social media and its influence on society.
She said the partnership, which allows OpenAI to train ChatGPT on content created by Redditors, is likely to be a boon for both companies. OpenAI gets the human conversation it needs to make its artificial intelligence seem more human; Reddit gets some revenue it needs to run a platform that’s been hard to monetize through advertising.
“If you look at Reddit, it’s a place that takes pride in having these natural, organic conversations that are not necessarily inflated or interrupted by commercial entities,” she said during an interview with Wharton Business Daily. (Listen to the podcast.) “From Reddit’s perspective, I think it’s a tremendous opportunity, and not surprisingly we have seen this reflected in the stock price.”
Indeed, Reddit’s stock surged 13% following the announcement. Reuters reported that the deal could yield $50 million to $60 million a year for the platform and puts the company on track to add $1.2 billion to its market capitalization.
“From Reddit’s perspective, I think it’s a tremendous opportunity, and not surprisingly we have seen this reflected in the stock price.”— Pinar Yildirim
Upsides of the Reddit and OpenAI Partnership
“I think Reddit is somewhat of an overlooked website,” Yildirim said, noting the site’s 80 million daily users and high traffic. “This gives them a chance to break away from the crowd and create an opportunity for themselves in terms of a financial future.”
She said the exclusive deal also gives OpenAI “a leg up” on its competition because quality data is central to building a better LLM, or large language model. Reddit provides just the sort of topical, diverse, deep conversations that OpenAI is looking for.
Beyond profits, Yildirim said, the partnership also clarifies what’s been murky for OpenAI in its mission to source content. The company has been scraping publicly available data across the internet for some time, but there have always been questions about privacy, copyright, and how that information can be used. Reddit has published a Public Content Policy that outlines how Redditor content is protected. Even so, Yildirim said the vast majority of people are unaware that what they post online can be repurposed, sometimes in ways they disagree with.
“In all of these deals, while they sound great, the one thing we have to keep in mind is the user reaction.”— Pinar Yildirim
Can Redditors Gain from the OpenAI Partnership?
The professor said it will be interesting to see how Redditors respond to the partnership. Stack Overflow, the community forum for coders and web developers, made a similar partnership this year with OpenAI, and some users protested by trying to delete their posts from the site. They didn’t want their questions and answers being used as data to train ChatGPT.
Yildirim said there’s a lesson in that revolt for Reddit. For example, what if someone on Reddit shares their personal story of trauma, then information is parsed by ChatGPT, and their experience becomes part of an author’s plot?
“In all of these deals, while they sound great, the one thing we have to keep in mind is the user reaction,” she said. “We need to make sure while we are creating these agreements, creating the next technology that helps most of us, that we think about privacy and data from the consumer’s perspective.”
She said it’s not unreasonable for Reddit and other sites to consider revenue-sharing with users to make them feel more comfortable about their content being repurposed. The arrangement would be similar to advertisers who pay influencers to endorse products.
“I see no reason why they couldn’t incentivize content creation, especially on certain topics,” she said. “In return, maybe these users will be featured because they are the domain experts and they get something from that, whether that’s the warm glow or the recognition of becoming the expert, or whether that comes in financial terms.”
