Finimize - 🤝 OpenAI's got Reddit's data

What’s going on here?

OpenAI inked a deal with Reddit that will see the AI systems of the future trained on the inner thoughts of internet dwellers – for better or worse.

What does this mean?

Reddit harbors the confessions, jokes, opinions, and intrusive thoughts of millions – making it the perfect platform to teach AI systems how to become more “human”. That’s essentially what this deal is: OpenAI will use Reddit’s data to develop and train generative AI tech, making it capable of turning simple prompts into text, images, and code. On top of that, the Microsoft-backed startup will run ads across Reddit’s site. In return, Reddit will use OpenAI’s know-how to roll out its own AI tools. And the deal has already paid off: the news sent Reddit’s shares up more than 10% on Thursday.

Why should I care?

Zooming out: Less isn’t more.

Thursday’s announcement isn’t the first of its kind: OpenAI has made many deals with media platforms eager to trade data for cash. For Reddit, this is an opportunity to build more revenue streams outside of advertising. That’s also why the company signed a $60 million deal with Google in January, handing over data to train the large language models that fuel generative AI solutions. So far, so good: Reddit reported that higher revenue was taking the company closer to profitability in its first earnings report since going public.

The bigger picture: The forums are ready.

News of the deal dropped the same week that Keith Gill – or “The Roaring Kitty”, as the interweb knows him – broke his three-year social media hiatus. Known for igniting the GameStop stock frenzy, Keith has a knack for setting Reddit threads on fire, as retail investors scramble to find the next blink-and-you-miss-it craze. His return could mean more buzz, activity, and data for OpenAI to tap into, making this partnership even more valuable.

What’s going on here?

China’s retail sales fell short of analysts’ expectations, but at least the country’s industrial sector had plenty to brag about.

What does this mean?

China’s retail sales were a measly 2.3% higher this April than last, well shy of the 3.8% that economists expected. That’s not exactly surprising: the country’s flailing property market has shaken homeowners’ financial confidence, so folk are taking each purchase seriously. The rescue mission has hardly been noticeable so far, either, with the real estate industry receiving almost 10% less investment in the first four months of this year than last. That said, China’s industrial sector – think manufacturing, mining, and utilities – managed to glide past production expectations, showing that the country’s reputation as “the world’s factory” is far from lost.

Why should I care?

Zooming out: The name’s Bond, emergency Bond.

China’s finance ministry is selling one trillion yuan ($138 billion) of bonds, and a sale of that size has only happened three times before in the last 26 years. Analysts expect that a significant chunk of that cash will be funneled straight into the property sector, which could bolster homeowners’ financial confidence and encourage them to spend more. At the same time, new measures are encouraging local governments to buy commercial buildings and turn them into affordable housing, as well as cutting the base mortgage rate and the minimum deposit for first-time buyers. Talk about home improvements.

The bigger picture: There are two sides to every story.

Mind you, China’s still the world’s second-biggest economy, despite that pesky property market bringing about plenty of bad press. Investors have even taken the opportunity to buy Chinese stocks while they’re trading for less than usual, which has sent China's main stock market index up 6% this year. Hong Kong’s index has stepped up by 13% in the same timeframe, too, as the region’s stocks tend to be more accessible to foreign investors.