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This illustrated photo taken on February 22, 2024 in Krakow, Poland, shows the website Reddit logo displayed on a laptop screen.
Washington
CNN
—
The Federal Trade Commission is investigating Reddit's plan to license platform content to an artificial intelligence company, the social media company said in a securities filing Friday.
The disclosure comes ahead of the company's long-awaited initial public offering. The initial public offering comes nearly 20 years after its launch and will be the first social media platform to go public in several years.
The FTC sent a letter to Reddit on Thursday outlining the scope of its investigation, according to Reddit's filing.
“FTC staff is conducting a private investigation focused on the sale, licensing, or sharing of user-generated content with third parties to train AI models,” Reddit revealed. “Given the novel nature of these technologies and commercial arrangements, we are not surprised that the FTC has expressed interest in this area.”
Reddit added that it does not believe the company violated U.S. consumer protection laws.
“The letter indicated that FTC staff is interested in meeting with us to learn more about our plans and intends to request information and documents from us as the FTC continues its investigation. ” the company said.
This disclosure was made as an amendment to Reddit's IPO filing.
The company has signed a deal to share platform data with Google to train the tech giant's AI models. The deal is said to be worth $60 million annually.
Reddit said earlier this week that it expects the IPO to be priced between $31 and $34 per share. Reddit, along with some existing shareholders, plans to offer 22 million Class A shares of the company and could raise up to $748 million from those shares in the IPO, according to a prospectus filed Monday.