Reddit & OpenAI Deal Explained: A Bargain In The AI War?

Reddit's share price jumped by nearly 11 per cent after the social media forum announced that it had struck a deal with OpenAI. Much like its earlier partnership with Alphabet's Google, the agreement will allow OpenAI to have real-time access to content through Reddit's data API. In turn, it will “enable Reddit to bring new AI-powered features" onto its platform.

This deal comes at a time when both AI players had announced the launch of new AI features, earlier this week. While OpenAI made its new AI model 'ChatGPT 4o' free for everyone, Google announced the launch of 'Project Astra' with enhanced AI-integrated functions.

As the AI war is gaining momentum, no company wants to be left behind in this space. Reddit is clearly playing a bargain here, by providing its vast content and real-time posts to tech giants in exchange for advanced in-built AI features.

What is the deal actually about?

As per the deal, OpenAI will be using Reddit's Data API to bring its content to ChatGPT and other new tools. 

"To do so, OpenAI will access Reddit’s Data API, which provides real-time, structured, and unique content from Reddit. This will enable OpenAI’s AI tools to better understand and showcase Reddit content, especially on recent topics," the company said in its blog post.

Unlike Google's reported $60 million deal with Reddit, which also included providing the tech giant with “more efficient ways to train models,” OpenAI's deal with Reddit did not mention anything around 'AI model training' or 'costs.'

An upper hand over our content?

Earlier this year, nearly 8 US newspapers had filed a lawsuit against Open AI's ChatGPT for allegedly using copyrighted content to train their AI models. 

AI companies require vast amounts of data to train their AI models. This data, largely in the form of content and information, is necessary for advancing emerging technologies in the AI space, like chatbots. However, a conflict is imminent in such scenarios as a large part of that data comes under intellectual property. 

While Reddit is a free social media forum, it perhaps becomes a bargain for AI companies to put their hands on human data that is not synthetic (Artificially created) in form. 

According to Rice University and Stanford University researchers, over-reliance on synthetic data for training AI can turn models stupid or MAD (Model Autophagy Disorder). MAD typically refers to the problem of a decline in the quality of output by AI models. “Without enough fresh real data, generative models are doomed to have their quality or diversity progressively decrease,” the researchers stated.

However, as AI continues to race on the advancement road, it would be worth looking at the borderline between intellectual property and AI-generated content getting blurred.