Reddit’s data licensing practices for AI models draw FTC scrutiny ahead of IPO


Reddit announced on Friday, as part of its upcoming IPO, that the company is under investigation by the Federal Trade Commission (FTC) for its data licensing practices. The FTC informed Reddit that it is conducting a non-public investigation into the practices by which user-generated content is sold, licensed, or shared with third parties to train AI models. Reddit emphasized that these practices are consistent with the values and rights of its users. The company expects to generate around USD 60 million in 2024 from the data licensing agreement it signed with Google in January alone. Reddit expects its growing platform data to be a key element in training leading Large Language Models (LLMs) and serve as an additional monetization channel.

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Online journalist Matthias is the co-founder and publisher of THE DECODER. He believes that artificial intelligence will fundamentally change the relationship between humans and computers.

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