Reddit sells user data for AI training, sparks FTC investigation

Reddit said it before With an initial public offering (IPO) set for next week, empowering users to post about artificial intelligence projects to Google and other companies could bring in $203 million in revenue over the next few years. The community-driven platform was forced to disclose on Friday that U.S. regulators have raised questions about the new business.

Reddit said in a regulatory filing that it received a letter from the U.S. Federal Trade Commission on Thursday asking “about our selling, licensing, or sharing of user-generated content with third parties to train artificial intelligence models.”

The FTC is the U.S. government’s primary antitrust regulator, with the power to sanction companies found to engage in unfair or deceptive trade practices. The idea of ​​licensing user-generated content for artificial intelligence projects has raised questions from lawmakers and rights groups about privacy risks, fairness and copyright.

Reddit isn’t the only company trying to make money from AI-licensed data, including user-generated data. Programming Q&A site Stack Overflow has signed a deal with Google, the Associated Press has signed a deal with OpenAI, and Tumblr owner Automattic says it’s working “with select AI companies” but will allow users to opt out of delivery own data. None of the licensors immediately responded to requests for comment. Reddit is not the only company to have received letters from the FTC regarding data clearances, Axios reported on Friday, citing an unnamed former agency official.

It’s unclear whether the letter to Reddit is directly related to scrutiny of other companies.

In Friday’s disclosure, Reddit said it did not believe it had engaged in any unfair or deceptive practices but warned that dealing with any government investigation could be costly and time-consuming. “This letter indicates that FTC staff are interested in meeting with us to learn more about our plans and that the FTC intends to request information and documents from us as the investigation continues,” Reddit said , the FTC letter described the review as related to a “nonpublic investigation.”

Reddit, whose 17 billion posts and comments are considered valuable by AI experts for training chatbots in the art of conversation, last month announced a deal to license content to Google. Reddit and Google did not immediately respond to requests for comment. The Federal Trade Commission declined to comment. (Advance Magazine Publishers, the parent company of WIRED publisher Condé Nast, owns shares of Reddit.)

Artificial intelligence chatbots like OpenAI’s ChatGPT and Google’s Gemini are seen as a competitive threat to Reddit, publishers and other ad-supported, content-driven businesses. Over the past year, the prospect of licensing data to AI developers has emerged as a potential advantage of generative AI for some companies.

But using data collected online to train artificial intelligence models has raised a host of questions in boardrooms, courts and Congress. For Reddit and other sites with user-generated data, those questions include who actually owns the content and whether it’s fair to license it out without giving the creator a cut. Security researchers have discovered that artificial intelligence models may leak personal data contained in the materials used to create them. Some critics believe the deals could make powerful companies more dominant.

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