Reddit stock jumps after OpenAI partnership

STORY: Shares of Reddit rose more than 14% in early trading on Friday. The surge comes a day after the site announced a partnership with artificial intelligence firm OpenAI.

The pact aims to draw in more users for the social media platform with AI-enhanced experience and attract more advertising revenue.

Reddit primarily generates revenue from advertising. But in a February filing, the company said it would explore new monetization channels, including offering creator tools and licensing its data to third parties.

With a daily active user count of more than 80 million, Reddit is considered a smaller player in the social media market.

The company went public on the New York Stock Exchange on March 21.

Its shares have climbed 66% from their IPO price of $34.

The deal comes amidst a growing number of lawsuits against OpenAI, with firms alleging unauthorized use of their content for training large language models.

In recent months, OpenAI has also secured content licensing deals with several publishers, including the Associated Press and the Financial Times.