Reddit shares drop as threat to cut off Google AI sparks standoff

Investing.com -- Reddit stock took a hit Wednesday morning, dropping 5.8% in premarket trading following reports that the social platform is threatening to block Google from using its content to train artificial intelligence models.

The move signals a growing high-stakes standoff between digital publishers and search engine giants.

According to a Wall Street Journal report, Reddit executives are considering pulling the plug on Alphabet’s access as the two companies negotiate a renewal of their existing data-licensing agreement. In 2024, Reddit inked a deal worth an estimated $60 million annually allowing Google to ingest its message boards to power AI development.

Now, Reddit is having second thoughts.

The core issue boils down to traffic cannibalization.

• Google’s AI-generated answer boxes now answer user queries directly on the search page, eliminating the need for users to click through to external forums like Reddit.




• While Reddit’s vast library of human discussion powers a massive chunk of Google search results, Google’s AI overhaul is actively cutting off the steady flow of visitor traffic that Reddit relies on to sell ads.

Reddit isn’t the only player rethinking its relationship with Silicon Valley. Media heavyweights including Reuters, Politico, The Economist, USA Today, and People Inc. are currently re-evaluating their Google partnerships under similar pressure.

Adding to the digital ecosystem’s strain, automated bot activity now accounts for more than 50% of all global web traffic, according to Cloudflare data—leaving platforms increasingly defensive over who gets to scrape authentic human conversation.

As tech platforms realize their data is the lifeblood of generative AI, licensing deals are turning from passive revenue streams into active battlegrounds over the future of web traffic.

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