Reddit stock falls 8% over Google AI deal uncertainty

On Wednesday, Reddit shares fell 8% after the Wall Street Journal reported that the company has discussed potentially shutting off Google's access to its content for AI model training. The two companies struck a $60 million（約96億円）-a-year deal in 2024, but it is set to expire soon, and negotiations over renewal are now underway.

Reddit's reconsideration stems from a painful reality other publishers have also experienced: Google's AI summaries have suppressed traffic to websites. Between June 2025 and 2026, Politico saw its Google traffic fall 23%, CNN's fell about 25%, and Business Insider's dropped more than 85%, according to the Journal. Reddit itself may be seeing similar effects. In a statement to CNBC, a Reddit spokesperson said the company is approaching negotiations "just like any business should, by focusing on doing what's best for Reddit" and that "a lot has changed since those first deals were signed." The statement emphasized that Reddit wants to ensure partnerships "recognize the unique value of Reddit's data."

Reddit's position has strengthened since the Google deal was first signed. In the first quarter of 2025, the company beat analyst expectations on earnings, with revenue jumping 69% year-over-year. Much of that growth came from its data licensing business, including a partnership with OpenAI that allows ChatGPT to train on Reddit content. During the earnings call, CEO Steve Huffman told analysts: "We have important partnerships with both Google and OpenAI. Those are very meaningful to us, and I think it's mutual." Yet his comment was made before the Journal's report of renegotiation talks, suggesting the company intends to use its growing leverage to secure better terms.

Reddit is not alone in pushing back against major AI companies. Last year, Chegg sued Google in federal district court, claiming that AI summaries hurt the company's traffic and revenue. Google has defended its AI features by arguing they help creators and publishers reach larger audiences, citing the billions of clicks it sends to websites across the web. Google made a similar statement to the Journal on Wednesday. Reddit is slated to report second-quarter earnings on July 30, which may shed light on the financial impact of the traffic shift and the status of ongoing negotiations.

Reddit's hesitation to renew its Google deal reflects a shift in how publishers are valuing their content in the age of generative AI. When the two companies first partnered in 2024, the benefit of having an AI giant promote access to Reddit's data seemed clear. But over the past year, the real cost has become visible: Google's AI-powered search summaries have quietly cannibalized traffic to many publishers, with some losing more than 80% of their search referrals. Reddit, which saw revenue jump 69% year-over-year partly due to its data licensing business with OpenAI, now has leverage and evidence that its content is valuable enough to demand better terms or walk away entirely.

This broader pattern has sparked a wave of reckoning across media. Chegg filed suit against Google last year over the same traffic damage. Reddit's own leadership has characterized its partnerships with both Google and OpenAI as "very meaningful" and "mutual," yet the reported negotiations suggest the company believes Google should pay more—or offer something else—to retain access. The outcome will likely set a precedent for how other publishers negotiate with AI giants, and it may influence the economics of training data licensing across the industry.

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