Reddit Stock Rises After-Hours: Retail Traders Loudly Cheer AI Content Licensing Push
Synopsis
The retail sentiment for the stock shifted to 'extremely bullish' after a report said that Reddit plans to seek dynamic pricing from partners OpenAI and Google.
The retail crowd cheered Reddit's push to expand its partnerships for sharing its forums for artificial intelligence (AI) training, following Bloomberg News' report on talks with Google on Wednesday.
On Stocktwits, the sentiment among retail investors for Reddit stock shifted to 'extremely bullish' early Thursday from 'neutral' the previous day, with message volume rising over 400% in the past 24-hour period.
Bloomberg, citing executives familiar with the discussions, reported that Reddit had started talks for its next content-sharing agreement with Google, expanding the one it struck more than a year and a half back for a reported $60 million.
Reddit plans to discuss with Google and OpenAI (Reddit and OpenAI struck a content licensing deal in May last year) over a potential new structure that would introduce dynamic pricing, potentially resulting in higher payments as Reddit's content grows more central to AI-generated answers.
The discussions mark an attempt by Reddit to shift away from purely transactional licensing agreements, according to the report.
Reddit stock climbed 1.5% intraday on Bloomberg's report, before ending marginally lower at $266.5 in Wednesday's session. Shares gained 1% in the after-hours session.
A Stocktwits user said: "$RDDT feels like $300 coming soon, momentum is strong."
The development highlights chaos in the media industry over how to handle AI firms.
Some, including the Associated Press and News Corp, the publisher of the Wall Street Journal, have signed licensing deals with OpenAI, while others, such as The New York Times, have taken the company to court for alleged copyright infringement.
In July, Reddit also filed suit against Anthropic, accusing the AI startup of illegally scraping content from its forums to train its Claude chatbot.
As of last close, RDDT shares are up 63% year-to-date.
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