Reddit to face US Federal Trade Commission inquiry on AI deal with Google

Reddit-Google deal: The US Federal Trade Commission (FTC) has initiated an inquiry into social media platform Reditt's practices concerning the sale, licensing, and sharing of user-generated content with third parties to train Artificial Intelligence (AI) models, the company has said. 

In response to the FTC's inquiry, Reddit stated, “Given the innovative nature of these technologies and business arrangements, it is understandable that the FTC has taken an interest in this area. We maintain that we have not engaged in any unfair or deceptive trade practices.”

The notification from the FTC was received by Reddit on March 14.

In February, Reddit was said to have agreed with Alphabet's Google to provide its content for the training of AI models used by the search engine giant. This contract with Google is estimated to be valued at approximately $60 million per annum and underlines Reddit's efforts to diversify its revenue streams amidst intense competition for advertising expenditure from platforms such as TikTok and Meta Platform's Facebook.

Reddit recently disclosed its intention to seek a valuation of up to $6.4 billion in its forthcoming US initial public offering, positioning itself for one of the most eagerly awaited stock market debuts in recent years.

(With Reuters inputs)