Reddit May End Google AI Training Deal as Search Traffic Plummets

Reddit is weighing whether to terminate its artificial intelligence content licensing agreement with Google, a decision that sent the social media company's shares down 9% on Wednesday, according to the Wall Street Journal.

The two companies signed a $60 million annual deal in 2024 that allowed Google to train its AI models on Reddit's user-generated content. That partnership is now approaching its expiration date, and Reddit is questioning whether the arrangement still serves its interests as Google's AI-powered search summaries have dramatically reduced traffic flowing to external websites.

The traffic collapse

The shift reflects a broader crisis facing publishers as Google prioritizes AI-generated overviews in search results. Between June 2025 and June 2026, Politico saw its Google traffic fall 23%, CNN dropped approximately 25%, and Business Insider experienced a decline exceeding 85%, the Journal reported.

These traffic losses have prompted several media companies to reassess their relationships with major AI platforms. Last year, Chegg filed a federal lawsuit against Google, alleging that AI summaries in search results damaged the company's traffic and revenue. Google has maintained that its AI features "send traffic to a greater diversity of sites" and help creators grow their audiences.

Reddit's AI licensing strategy

Reddit has positioned data licensing as a key revenue stream alongside its core advertising business. The company also maintains a similar content partnership with OpenAI, allowing the ChatGPT developer to train models on Reddit discussions.

These licensing deals contributed to Reddit's strong first-quarter performance, when revenue jumped 69% year-over-year to $663 million, surpassing analyst estimates of $611 million. CEO Steve Huffman told analysts during the earnings call that partnerships with both Google and OpenAI remain "very meaningful" and mutually valuable.

Reddit is scheduled to report second-quarter earnings on July 30. The stock has fallen roughly 27% year-to-date.

Why it matters

Reddit's deliberations highlight a fundamental tension in the AI economy: platforms that provide training data may undermine their own traffic and engagement when AI systems surface that content directly in search results rather than directing users to the original source. As Google and other search engines increasingly answer queries with AI-generated summaries, content creators face difficult choices about whether licensing deals compensate for lost visibility and audience relationships. The outcome of Reddit's negotiations could influence how other publishers approach similar partnerships.

The Wall Street Journal first reported details of Reddit's discussions about the Google partnership and the traffic declines affecting major publishers.