The Deal in Question
Reddit and Google entered an agreement in 2024 that gave the search giant permission to use Reddit's content for training its AI systems. According to the Wall Street Journal, that deal is worth roughly $60 million annually. The contract is about to expire, and the two firms are currently discussing whether to extend it.
However, the Journal reported that Reddit has discussed cutting off Google's access to its content for AI purposes entirely.
Why is Reddit having second thoughts? Google's AI-powered summaries have been diverting traffic away from websites that appear in search results. "The company is evaluating the partnership again because Google is now prioritizing AI-generated overviews in its search results, which lowers the amount of referral traffic that Reddit receives," according to the Journal, which cited people familiar with the discussions.
The Google AI Traffic Problem
This isn't a challenge unique to Reddit. Numerous large publishers and news organizations have experienced steep declines in Google-driven traffic as AI summaries have become more common. Between June 2025 and 2026, Politico lost 23% of its Google traffic, CNN saw a 25% drop, and Business Insider's traffic from Google fell more than 85%, the Journal reported.
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Last year, Chegg filed a lawsuit against Google in federal district court, alleging that the AI summaries appearing in search results had hurt the company's traffic and revenue.
Google has fought back. The company communicated to both CNBC and the Wall Street Journal that its AI tools help creators and publishers expand their audiences, and that it "sends billions of clicks to sites across the web, and AI Overviews send traffic to a greater diversity of sites."
Reddit's Mixed Picture
Reddit's underlying business has been performing strongly. In the first quarter, the company reported earnings of $1.01 per share, beating the consensus estimate of 58 cents, and revenue of $663 million, which exceeded the $611 million analysts had forecast. Revenue surged 69% compared with the same period a year earlier.
During the earnings call, CEO Steve Huffman said: "We have important partnerships with both Google and OpenAI. Those are very meaningful to us, and I think it's mutual. We continue to value those."
Despite those strong results, the stock is down roughly 27% year-to-date.
Reddit also has a comparable arrangement with OpenAI that permits the ChatGPT developer to train its AI models on Reddit's content.
The upcoming second-quarter earnings report is scheduled for July 30. Investors will be closely watching for any news regarding the Google negotiations.
What the Data-Licensing Business Means for Reddit
If Reddit were to walk away from the Google deal, it would lose a $60 million annual income stream from Google at a time when the company is still working to diversify beyond advertising.
At the same time, keeping the partnership could mean accepting lower referral traffic as Google's AI summaries become more prominent. The tension between short-term licensing fees and long-term user engagement is at the heart of the renegotiation.
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