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FTC Inquiry

Before Reddit’s planned IPO, the Federal Trade Commission (FTC) has launched a “non-public inquiry” into how the company licenses user-generated data for training AI models. This inquiry is part of the FTC’s oversight role in ensuring fair and transparent data practices.

Data Licensing for Reddit

Data licensing is a relatively new revenue stream for Reddit, which primarily relies on advertising. However, the company has recently partnered with third-party AI companies, including Google, to license its data for training their models.

Impact on IPO

It’s unclear how the FTC inquiry will impact Reddit’s upcoming IPO, which is scheduled for March 21. The inquiry may delay or affect the company’s valuation, depending on the findings of the FTC.

AI Data Training

Generative AI tools like ChatGPT and Midjourney require massive amounts of data for training. The internet is a rich source of such data, and companies like Reddit are exploring ways to monetize their data by licensing it to AI developers.

Reddit’s Partnership with Google

Reddit has partnered with Google to train its AI models. This partnership could potentially raise antitrust concerns, as Google already dominates the search engine market. The FTC may investigate whether this partnership gives Google an unfair advantage in the AI space.