Reddit’s AI Content Licensing Ahead of IPO Debut
Reddit revealed in a securities filing on Friday that the Federal Trade Commission (FTC) is investigating its intentions to license platform content to artificial intelligence firms. This disclosure precedes Reddit’s highly anticipated initial public offering, marking its debut in the stock market nearly two decades after its inception. The FTC, in a letter sent to Reddit on Thursday, delineated the inquiry’s parameters, as stated in the filing.
“Reddit disclosed that the FTC’s staff is currently conducting a non-public inquiry centered on our activities involving the sale, licensing, or sharing of user-generated content with third parties for the purpose of training AI models,” the company stated.
“Considering the innovative nature of these technologies and business arrangements, we anticipated the FTC’s interest in this domain.” Furthermore, Reddit clarified that it does not perceive any breaches of US consumer protection laws in its operations.
Balancing Innovation and Regulation
Reddit revealed that the FTC’s staff is presently engaged in a non-public inquiry focused on our actions related to the sale, licensing, or sharing of user-generated content with third parties for AI model training,” the company declared.
“Given the pioneering nature of these technologies and business arrangements, we foresaw the FTC’s attention in this area.” Additionally, Reddit clarified that it does not believe it has violated any US consumer protection laws in its operations.
In addition to the FTC probe, Reddit has attracted attention for its collaboration with Google. Under the agreement, Reddit will provide its platform data to Google, allowing the tech behemoth to refine its AI models. The deal, reportedly valued at $60 million annually, has made waves in the industry.
Reddit Sets IPO Pricing Amid FTC Probe
Earlier this week, Reddit announced its intention to price shares between $31 and $34 each for its upcoming IPO offering. The company, along with certain existing stockholders, intends to offer 22 million shares of its Class A stock, potentially raising up to $748 million from these shares, as per a prospectus filed on Monday.
The FTC’s investigation adds a level of scrutiny to Reddit’s AI licensing initiatives and underscores the growing interest in leveraging user-generated content for training AI models. The outcome of this inquiry will likely influence Reddit’s future business strategies and could also have broader implications for AI licensing within the social media sector.
