UPDATE 2-Reddit receives FTC inquiry on AI-related deals ahead of IPO

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March 15 (Reuters) – Reddit said on Friday the U.S. Federal Trade Commission is conducting an inquiry focused on the company’s sale, licensing and sharing of user-generated content with third parties to train artificial intelligence models.

“Given the novel nature of these technologies and commercial arrangements, we are not surprised that the FTC has expressed interest in this area. We do not believe that we have engaged in any unfair or deceptive trade practice,” according to Reddit.

The company said it had received the letter from the FTC on March 14.

In February, Reuters reported social media platform Reddit struck a deal with Alphabet’s Google to make its content available for training the search engine giant’s AI models.

The contract with Google is worth about $60 million per year and showcases how Reddit is seeking to generate new revenue amid fierce competition for advertising dollars from the likes of TikTok and Meta Platform’s Facebook.

Earlier this week, Reddit said it was aiming for a valuation of up to $6.4 billion in its U.S. initial public offering as it nears one of the most anticipated stock market debuts of the past few years. (Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shounak Dasgupta)