Reddit has teamed up with OpenAI to integrate its content into the widely used chatbot ChatGPT, a move that propelled the social media platform's shares by 12 percent in after-hours trading. This partnership highlights Reddit's strategy to expand its revenue streams beyond advertising, following a recent collaboration with Alphabet to provide content for training Google's AI models. Under the agreement, ChatGPT and other OpenAI products will leverage Reddit's application programming interface (API) to access its content. Additionally, OpenAI will become a Reddit advertising partner, further solidifying their collaboration.

Reuters previously reported a $60 million annual deal between Reddit and Alphabet ahead of Reddit's IPO in March, signaling the growing importance of data licensing for Reddit's revenue growth. The market responded positively to Reddit's initiatives, with its shares surging by 10.5 percent to $62.31 in after-hours trading. This uptick reflects investor confidence in Reddit's diversification efforts and its ability to capitalize on data licensing opportunities, as evidenced by strong revenue growth and improved profitability reported in its recent earnings following its IPO.