Reddit Under FTC Investigation Over AI Data Licensing Practices By Investing.com

© Reuters

(Title and first paragraph of article corrected to reflect that the FTC is conducting an investigation, not an inquiry)

Investing.com — Reddit is under investigation by the Federal Trade Commission over how the social media company plans to share and commercialize user-generated data with third-party artificial intelligence models.

The company received a letter from the Federal Trade Commission (FTC) stating that “FTC staff is conducting an undisclosed investigation focused on the sale, licensing, or sharing of user-generated content with third parties to train AI models.” “ Reddit said in an update to its Regulation S-1 filing on Friday.

But Reddit said it did not believe it had engaged in “any unfair or deceptive trade practices,” adding that the FTC was leaning forward with its plans and “intends to request information and documents from us as its investigation continues.”

The update comes as the company begins its initial public offering roadshow ahead of its expected public market debut next week. Reddit plans to sell stock for $31 to $34 per share in the public offering, potentially valuing the company at about $6.5 billion.