Reddit may terminate its $60 million yearly licensing agreement with Google as AI search reduces user referrals and ad revenue.
Reddit is weighing the termination of its $60 million annual data-licensing deal with Google, citing concerns over AI-driven search results that keep users on Google’s platform. The potential move follows discussions about renewing the 2024 agreement, with Reddit seeking either higher compensation or restrictions on how its content appears in Google’s AI products.
The current deal allows Google to use Reddit’s user-generated discussions to enhance search results, but AI summaries may reduce traffic redirected to Reddit. The platform’s unique, unfiltered conversations—often more valuable than corporate content—could lose visibility if AI answers quote them directly, diminishing ad revenue opportunities.
Shares of Reddit fell 8.7% following the report, marking its steepest decline since March. The company’s leverage stems from its niche content, but walking away risks losing Google’s referral traffic entirely.