Reddit stock drops 9% as Google AI content deal nears expiration

Reddit and Google struck a $60 million-a-year woody successful 2024 allowing Google to bid its AI models connected Reddit's content, according to CNBC. That statement is ending soon, and the 2 companies are successful talks astir perchance renewing it. With Google's AI-powered query responses cutting into postulation to third-party sites, Reddit's enactment is questioning whether the statement inactive serves the company's interests, the Journal reported, citing radical acquainted with the matter.

Reddit is not alone. USA Today, Politico, the Economist, People Inc. and Reuters are each weighing how, oregon adjacent if, they volition proceed moving with Google. USA Today's flagship nationalist outlet saw its integrated Google hunt postulation from U.S. readers diminution by adjacent to 50% successful the 12 months ending June 2026, per Semrush data. Over that aforesaid twelve-month stretch, Politico saw its Google hunt postulation diminution 23%, CNN's fell astir 25%, and Business Insider experienced a nonaccomplishment of much than 85%.

"This is existential for immoderate categories of publishers," David Buttle, CEO of media consulting steadfast DJB Strategies, said.

In response, Google said its AI hunt tools nonstop important postulation crossed the web and, successful a connection to the Journal, said those features enactment assemblage maturation for publishers and contented creators.

Reddit besides has a information licensing concern with OpenAI that allows the ChatGPT shaper to bid its models connected Reddit's content. Reddit CEO Steve Huffman addressed some relationships connected a caller net call. "We person important partnerships with some Google and OpenAI," Huffman said. "Those are precise meaningful to us, and I deliberation it's mutual. We proceed to worth those."

Reddit reported first-quarter gross of $663 million, a 69% leap from a twelvemonth earlier, with advertizing driving the bulk of that growth. Data licensing, which includes the Google and OpenAI partnerships, generated $39 cardinal successful the quarter. Reddit is scheduled to study second-quarter net connected July 30.

Reddit's stock terms has fallen astir 27% since the commencement of the year.