Reddit stock falls 9% as it weighs cutting Google’s AI access
Reddit lost about $3.2 billion in market value after the Wall Street Journal reported it may end Google’s $60 million-a-year AI training deal. The reason is that Google’s AI answers are eating everyone’s traffic — including, eventually, Reddit’s.
Sixty million dollars a year is what Google pays Reddit for permission to train on other people’s posts.
Reddit made $663 million in a single quarter this year. Licensing was $39 million of it.
Hold onto those two numbers.
What happened Wednesday
Shares dropped about 9%, taking roughly $3.2 billion in market value with them, after the Wall Street Journal reported that Reddit executives have internally discussed cutting Google off from the site for AI training purposes.
The deal dates to February 2024, signed just ahead of Reddit’s IPO. It’s expiring. Renewal talks are, per the Journal, not going smoothly, and Reddit’s leadership has gotten as far as weighing whether to restrict Google’s access outright.
CEO Steve Huffman told analysts recently that the company values its partnerships with both Google and OpenAI. That was before this. Second-quarter earnings land July 30.
Why walk away from free money
Because it isn’t free.
Google’s AI Overviews answer the question at the top of the page, which means the click never happens. Semrush data cited by the Journal put numbers on it: between June 2025 and June 2026, Politico’s Google search traffic fell 23%. CNN’s dropped about 25%. Business Insider lost more than 85%.
Eighty-five percent.
Reuters, USA Today, Politico, People, and The Economist are all reportedly reassessing their arrangements with Google right now. Reddit’s just the one with a stock price that moves in public.
Reddit was supposed to be the exception
Here’s what makes this strange.
Every other publisher on that list got flattened by Google’s algorithm shifts. Reddit got enormous.
Sistrix data has Reddit’s search visibility climbing 1,328% between July 2023 and April 2024. It went from the 68th most visible domain in US organic search to the fifth. Sixty-three spots.
That happened alongside Google’s Helpful Content Update. It also happened alongside a $60 million check.
Google says ranking is algorithmic and the licensing agreement is a separate business matter. SEO analysts have spent two years finding the chronology interesting.
The glue
In May 2024, a few months into all this, someone searched for why cheese slides off pizza. Google’s AI Overview suggested adding about an eighth of a cup of non-toxic glue to the sauce for tackiness.
The source was an 11-year-old Reddit comment. Eight upvotes. Posted by a user whose handle can’t run in this article.
The same rollout advised people to eat one rock per day, which came from The Onion.
Reddit contains an enormous amount of genuine expertise. It also contains a decade of sarcasm, trolling, and jokes that a language model reads as sincere technical advice, and there is no reliable way to tell a machine which is which.
Less Reddit, better results?
Adding “reddit” to a query was a workaround people invented because the open web had gotten unusable — fourteen paragraphs about a blogger’s grandmother before the vacuum recommendation, affiliate spam, AI review sites reviewing products nobody opened.
Against that, a thread of real people arguing is an upgrade. Reddit didn’t cheat its way to the top of search. The competition collapsed.
But there’s a difference between “Reddit when I ask for it” and Reddit as the default authority on everything, which is roughly where the last two years landed. Specialists slid down the page. Trade press, professional reviewers, people who do the thing for a living, all outranked by an anonymous opinion from 2019 about a product that’s been discontinued since.
Whether that gets better if the deal dies is a separate question, and the answer is probably no.
What nobody’s saying out loud
The $60 million covers AI training. Search ranking is a different system. Reddit blocking Google’s crawlers for model training would not automatically demote r/BuyItForLife in your search results, and nobody at either company has suggested otherwise.
Analysts have flagged de-ranking as a risk if relations sour. That’s a forecast about corporate behavior, not a technical consequence.
So the fantasy version of this story, where Reddit walks and search returns to some pre-2023 equilibrium, isn’t on the table.
What’s actually on the table
Google’s AI answers have gotten substantially better since the glue era. The Business Insider reporter who made and ate a glue pizza to prove a point admitted by late 2025 that she uses AI Overviews constantly now, and that this is bad for people like her.
Reddit shares are down roughly 27% on the year. Wall Street’s average price target still sits well above where the stock trades, because the bull case was always that Reddit is the last big pile of authentic human conversation and everyone building AI will need to rent it.
That case doesn’t get weaker if Google walks. It gets more expensive, which is the entire negotiation.
July 30. Huffman’s going to get asked.
Article compiled and edited by Derek Gibbs (entertainment editor) and the Clownfish TV newsroom.
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Hat Tips:
The Wall Street Journal — the internal discussions about ending Google’s AI content access, the stalled renewal, and the other publishers reassessing
CNBC / Quartz — the $60M deal terms, Huffman’s partnership comments, and Reddit’s Q1 revenue and licensing split
IBTimes / Invezz — the 9% drop, the $3.2 billion in lost market value, and the year-to-date decline
Semrush (via WSJ) — the Politico, CNN, and Business Insider traffic declines
Sistrix (via Amsive and eMarketer) — Reddit’s 1,328% visibility jump and the climb from 68th to 5th
Snopes / Forbes / Business Insider — the AI Overviews glue incident and its Reddit comment source