Reddit stocks are plummeting on Wednesday on reports that the company is considering not extending a deal with Google to let it use its content to train its AI models.
Shares of the company fell as much as 9% during the session before pairing some gains. It has dropped more than 25% so far this year.
CNBC recalled that the companies struck the deal in 2024 to allow Google to use Reddit's content to train its AI models. The company got $60 million a year for the deal. It also has a similar deal with OpenAI. The two have helped the company beat estimates last quarter, noting its revenue soared 69% compared to the previous year.
"We have important partnerships with both Google and OpenAI," company CEO Steve Huffman said back then. "Those are very meaningful to us, and I think it's mutual. We continue to value those," he added.
However, Reddit is now reconsidering how much the deal is benefiting it because Google's AI summaries have reduced traffic to the website, same as it has happened to many others, including news outlets. The Wall Street Journal noted that Politico's Google traffic has fallen 23% between June 2025 and the same month of this year. CNN's has fallen by 25% and Business Insider's has plummeted 85% in the same period.
In fact, Chegg sued Google in federal court last year, claiming its AI summaries had hurt the company's revenue. Back then, Google told CNBC that the company's search engine "sends billions of clicks to sites across the web, and AI Overviews send traffic to a greater diversity of sites." It gave a similar statement to the WSJ on Wednesday, claiming its AI features help publishers grow their audiences.
A Reddit spokesperson told International Business Times that the company is "approaching these negotiations just like any business should, by focusing on doing what's best for Reddit."
"A lot has changed since those first deals were signed, but our goals are the same: making sure any partnerships drive our business and recognize the unique value of Reddit's data. There is a wide range of ways to do that; those are all things we'll discuss at the negotiating table," the spokesperson added.
