- FTC is investigating Reddit’s plans to license platform content to AI companies
- Reddit denies violating US consumer protection laws in response to FTC inquiry
- Reddit’s upcoming IPO and data sharing agreement with Google for AI model training
According to a report from CNN, the Federal Trade Commission (FTC) is currently investigating Reddit’s intentions to license its platform content to artificial intelligence (AI) companies. This inquiry was made apparent in a securities filing submitted by Reddit. The FTC sent a letter to Reddit outlining the scope of the investigation, specifically focusing on the potential sale, licensing, or sharing of user-generated content with third parties for AI model training purposes. In response, Reddit stated that they do not believe they have breached US consumer protection laws.
Reddit also mentioned that the FTC staff has shown interest in meeting with them to gain a better understanding of their plans and to collect relevant information and documents as the investigation progresses.
Additionally, Reddit is gearing up to go public with its upcoming initial public offering (IPO), making it the first social media platform to do so in years. The company has forged a data sharing agreement with Google to provide its platform data for training AI models, a deal purportedly valued at $60 million annually. As Reddit prepares for its IPO, it anticipates pricing shares between $31 and $34 each, potentially raising up to $748 million from the sale of 22 million Class A stock shares offered by Reddit and existing stockholders. This disclosure was made as an amendment to Reddit’s IPO filing earlier in the week.