NIXsolutions: FTC to Investigate Reddit’s AI Content Licensing Deals

The US Federal Trade Commission (FTC) is set to scrutinize Reddit’s agreements to license its artificial intelligence training platform content, as per documents filed with the Securities and Exchange Commission (SEC). Reddit, in the process of filing its initial public offering (IPO), disclosed that the regulator has notified it of its intention to request information and documents regarding AI deals.

NIX Solutions

FTC Inquiry into Reddit’s AI Content Licensing

The FTC’s interest in Reddit’s new direction regarding AI content remains unspecified. In a statement, Reddit confirmed receipt of a letter from the FTC on March 14, 2024, indicating that the FTC staff would conduct a private review concerning the sales, licensing, and sharing of user-generated content with third parties for AI model training. Reddit acknowledged the novelty of such technologies and commercial agreements and expressed readiness to cooperate with the FTC’s inquiries. However, it asserted its belief in the absence of any unfair or deceptive trading activities.

Reddit’s Strategic Approach to Revenue Generation

The licensing of user content constitutes a pivotal aspect of Reddit’s revenue strategy as it gears up for its IPO, notes NIXsolutions. Highlighting its commitment to exploring such agreements, Reddit revealed a $60 million annual deal with Google to train AI models using its content. Despite these initiatives, Reddit maintains it is still in the early stages of these endeavors. Notably, several other companies have also received similar letters from the FTC, as reported by Axios.

We’ll keep you updated on any developments regarding the FTC’s investigation into Reddit’s AI content licensing deals. Stay tuned for more insights as the situation unfolds.