Reddit Stock Falls on Report of Potential Google AI Deal Non-Renewal
Reddit shares declined significantly after a report surfaced suggesting the company is considering not renewing its content deal with Google for AI training purposes.
Shares of Reddit experienced a notable drop, falling approximately 9% on Wednesday, following a Wall Street Journal report. The report indicated that the company has discussed halting Google's access to its content, which the search giant uses for training its artificial intelligence models.
The two companies had previously struck a deal allowing Google to utilize Reddit's vast dataset for AI development. However, with Google increasingly prioritizing AI overviews in search results, which has been shown to reduce traffic to external websites, Reddit is reportedly re-evaluating the benefits of this partnership. The deal is said to be worth around $60 million annually.
This trend of reduced search traffic is not isolated to Reddit. The Wall Street Journal noted similar declines for other major publishers, including Politico, CNN, and Business Insider, between June 2025 and June 2026, due to the rise of AI summaries in Google searches.
Reddit also maintains a similar data licensing agreement with OpenAI. This area of business contributed to Reddit surpassing analyst expectations in its recent quarterly earnings report. The company is scheduled to release its second-quarter financials on July 30.