The US Federal Trade Commission (FTC) has initiated an investigation into Reddit’s practice of licensing user-generated content to artificial intelligence (AI) companies, according to Times of India. This inquiry comes shortly before Reddit’s anticipated IPO and involves agreements with tech giants, such as Google, reportedly in a $60 million deal to incorporate Reddit data for AI model training.
The FTC’s focus is on Reddit’s sharing of user-generated content with third parties for AI model training. While Reddit stated that it does not believe it has violated any trade practices, the FTC’s interest is not unexpected given the unique nature of these partnerships. In fact, Reddit is one of many companies being scrutinized by the FTC through similar inquiries.
The timing of this investigation is crucial as Reddit has been promoting its AI licensing deals as a significant revenue source before going public. The inquiry has the potential to impact Reddit’s IPO plans and investor interest in the company.
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In conclusion, the FTC’s investigation into Reddit’s AI licensing practices adds a layer of complexity to the company’s upcoming IPO. As the situation unfolds, investors and tech enthusiasts will be watching closely to see how this inquiry impacts Reddit’s future partnerships and revenue streams.
