Reddit stocks fell 9% on Wednesday after the Wall Street Journal reported the company has discussed shutting off Google's access to its content for artificial intelligence use. The decline follows concerns about the $60 million annual deal between the two companies, which is ending soon and under renegotiation. The 2024 agreement allowed Google to train its AI models on Reddit's content, but Google's AI summaries have reduced traffic to websites from search results, prompting Reddit to reconsider the partnership's benefits according to people familiar with the matter cited by the Journal. Reddit stocks are down roughly 19% year-to-date amid these developments.
Reddit Stocks Fall 9% Following WSJ Report on Google Deal
Reddit stocks declined 9% on Wednesday following the Wall Street Journal report. The stock is down roughly 19% year-to-date. The two companies struck a deal in 2024 to allow the search giant to train its AI models on Reddit's content. According to the Journal, Reddit's $60 million-a-year deal with Google is ending soon, and the companies are in talks about potentially renewing the partnership. CNBC has reached out to both Reddit and Google for comment.
Google AI Summaries Reduce Publisher Traffic
As Google's AI summaries reduced traffic to websites from the search results page, Reddit is reconsidering the benefits of the deal, according to the Journal, citing people familiar with the matter. The search traffic trend can be seen on other sites as well, with Politico's Google traffic falling 23%, CNN's falling about 25%, and Business Insider's dropping more than 85% between June 2025 and 2026, the Journal reported.
Reddit Reports 69% Revenue Growth in Q1
During the first quarter, the company blew past analysts' expectations after revenue jumped 69% from a year earlier, reporting earnings per share of $1.01 versus 58 cents expected, and revenue of $663 million versus estimates of $611 million. Reddit has also had a similar partnership with OpenAI that allows for the ChatGPT maker to train its AI models on its content, as part of Reddit's data licensing business that helped fuel an earnings beat last quarter. "We have important partnerships with both Google and OpenAI," Reddit CEO Huffman told analysts on the earnings call. "Those are very meaningful to us, and I think it's mutual. We continue to value those."
Reddit Schedules Q2 Earnings Report for July 30
The company is set to report its second-quarter earnings on July 30.
FAQ
What caused Reddit stocks to fall on Wednesday?
Reddit stocks fell 9% on Wednesday after the Wall Street Journal reported the company has discussed shutting off Google's access to its content for artificial intelligence use. The decline followed concerns about the $60 million annual deal ending soon.
How much did Reddit's revenue grow in Q1?
Reddit's revenue jumped 69% from a year earlier during the first quarter, reporting earnings per share of $1.01 versus 58 cents expected, and revenue of $663 million versus estimates of $611 million.
When will Reddit report its Q2 earnings?
Reddit is set to report its second-quarter earnings on July 30.
