● Covered by 1 source · 1 reportMedium impact
Reddit shares drop 9% amid potential end of Google AI content deal
Reddit's shares fell 9% after reports indicated it may not renew its $60 million AI content deal with Google. The deal, struck in 2024, has been reconsidered due to declining traffic from Google's AI summaries, reflecting broader trends affecting various news sites.
Key points
- Reddit shares down 9% following report on Google deal.
- Current $60 million deal with Google is up for renewal.
- AI content deal negotiations are ongoing.
Reddit's Stock Drop
Shares of Reddit declined by 9% following a Wall Street Journal report concerning its negotiations with Google. The report indicated that Reddit may shut off Google's access to its content for AI purposes. This decline contributes to a 19% drop in Reddit's stock value for the year.
Background on the Google Deal
In 2024, Reddit and Google entered a deal that allowed Google to use Reddit's content for training AI models. However, Google’s AI summaries have reportedly reduced traffic to Reddit and similar sites, prompting Reddit to reassess the arrangement. Multiple news organizations have experienced significant traffic drops attributed to AI-related changes.
Financial Context
Despite the current concerns, Reddit recently posted strong financial results, exceeding expectations with a revenue increase of 69% from the previous year. Earnings per share for the first quarter reached $1.01, surpassing estimates of 58 cents. Reddit's data licensing, including AI partnerships, was a crucial factor in this performance.
CEO's Reassurances
Reddit CEO Steve Huffman emphasized the importance of existing partnerships with Google and OpenAI during an earnings call, stating these collaborations are mutually beneficial. The negotiations regarding the Google deal are ongoing as Reddit approaches its second-quarter earnings report scheduled for July 30.
Impact on the Tech Landscape
The potential ending of Reddit's deal with Google highlights ongoing concerns over traffic reduction in the context of AI content utilization. This situation is reflective of the broader challenges for content-based platforms navigating partnerships with major tech companies, raising questions about data access and monetization in the AI landscape.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
The daily brief
One email each morning: the day's tech stories, clustered across outlets and summarized. No account needed.
One email a day. Unsubscribe in one click, any time.
Today's brief
Spend a few minutes, get the whole day. Every topic's top stories in one hands-free rundown — listen, watch, or read the transcript.
▶ Play today's brief
New every morning, and the back catalogue is archived by date.
Reporting from
Reddit's shares fell 9% after reports indicated it may not renew its $60 million AI content deal with Google. The deal, struck in 2024, has been reconsidered due to declining traffic from Google's AI summaries, reflecting broader trends affecting various news sites.