Reddit's stock fell sharply on Wednesday after the Wall Street Journal reported that the company is considering restricting Google's access to Reddit posts to prevent their use in training artificial intelligence models. CNBC noted that Reddit shares have lost roughly 27 percent of their value year-to-date.
Background of the potential change
Reddit and Google reached an agreement in 2024 allowing Google's AI models to be trained on Reddit content. The Wall Street Journal reports that Reddit is re-evaluating the benefits of that deal because Google's AI-generated summaries are reportedly diverting substantially less referral traffic from search to Reddit.
This decline in referral traffic appears across other publishers as well: Politico saw 23 percent less traffic from Google, CNN about a 25 percent decline, and Business Insider’s traffic dropped by more than 85 percent between June 2025 and June 2026.
Consequences and precedents
Because of falling referral traffic, many media companies and publishers are reassessing relationships with major tech firms; some have pursued legal remedies to protect intellectual property. Last year, education services provider Chegg sued Google in federal court, arguing that AI-generated summaries from the search engine siphoned visitors away and hurt the company’s results and revenue.
Google has responded to such criticisms by saying that AI services actually support content creators and publishers in growing their audiences, and that AI summaries direct users to a more diverse set of websites.
Reddit's business ties and recent financials
Reddit’s $60 million-per-year agreement with Google is set to expire soon, and the parties are negotiating whether to renew or modify the partnership. Reddit also has a similar arrangement with OpenAI that allows ChatGPT models to be trained on Reddit posts; data-licensing revenue from such deals was a significant contributor to the company’s recent quarterly performance.
In the first quarter, Reddit reported revenue up 69 percent year-over-year. Earnings per share were $1.01, beating analyst expectations of $0.58, and revenue totaled $663 million versus $611 million expected by the market.
Reddit CEO Steve Huffman noted that partnerships with both Google and OpenAI are important and mutually beneficial to the company. Nevertheless, Reddit shares were down about 8.5 percent in trading on the day the story was reported.
Why this matters
The situation highlights tensions among digital content proprietors, referral traffic, and AI development: publishers rely on search-driven traffic as a revenue source, while technology companies argue AI summaries enhance and broaden user experience. If Reddit limits Google's access, it could set a precedent for other platforms and affect the legal and commercial landscape for public data used to train AI models.
