Reddit revealed in a securities filing on Friday that the Federal Trade Commission is investigating the social media company’s intentions to lease material from its platform to artificial intelligence firms.
The announcement was made prior to the company’s eagerly awaited IPO, which is scheduled to occur some 20 years after its founding and will make it the first social media platform to go public in a long time.
According to Reddit’s petition, the FTC sent a letter outlining the scope of the investigation on Thursday.
Reddit revealed that the FTC’s staff is working on a non-public investigation centered on our sharing, leasing, or selling user-generated content to other parties for the purpose of training AI models.
“We are not surprised that the FTC has expressed interest in this area, given the novel nature of these technologies and commercial arrangements.”
According to Reddit, the firm doesn’t think it’s broken any US consumer protection laws.
Reddit’s IPO filing was amended to include the disclosure.
In order to train Google’s AI models, the company has agreed to share platform data with the internet giant. The annual value of the arrangement is reportedly $60 million.
Reddit announced earlier this week that it anticipates pricing its first public offering (IPO) shares between $31 and $34. According to a prospectus filed on Monday, Reddit and a few current investors intend to offer 22 million shares of the company’s Class A stock, which may raise up to $748 million for the IPO.