Reddit hits reverse as AI deal turns sour

Reddit looked to capitalise on their vast trove of user-generated content with AI deals. As the reality of the new search era becomes apparent, they are scanning the publisher playbook in order to preserve its own future.

by Rob Corbidge

Published: 13:35, 05 November 2026

Two fundamental lessons my non-technical brain has absorbed are that almost every piece of software is a variation on a file system, and every social media platform is a forum site in disguise.

The latter is the matter of concentration this week, on the back of Reddit making a decision that neatly delineates the publishing era we find ourselves in. This decision to move Reddit to a logged-in status platform, drawing it into line with every major social platform, marks the end of a particular way of seeing what the internet is for, at least for the time being.

The company floated in 2024, and its latest results didn't please the market, with its once-soaring share price in fairly steep decline. A reported fall in active US users was one catalyst for this, even given a rise in less lucrative foreign users. AI search - aka Google AI Overviews - is the villain here, with Reddit CEO Steve Huffman, one of the original founders, telling the company's earnings call that, "The biggest impact was on logged out and web traffic, but some of the impact flows through to logged in and app traffic since search referral is a common source of re-engagement for users. The company helped to offset the declines by both driving reach primarily through user marketing and also by continuing to improve the product. These declines have continued into the early part of Q4. During October, we have seen that search traffic has dropped by more than one million referrals on average per week."  

I actually had cause to use Reddit last week with exactly the type of query that Reddit was made for. Requiring to find a particular place for a particular activity in a particular part of the United States, I appended my five word search with "Reddit". Sure enough, like a diamond-tipped information drill, the result that I needed was returned with a link from Reddit's archives and put me on the right track, with the correct particular US terminology for what I was looking for. I wasn't logged in. It's likely I could have put the same request into any one of a number of LLMs, and got the same result, albeit with a Reddit link somewhere on the page, maybe.

And that is the whole thing in a nutshell. While Reddit's CEO says he hopes to keep their famous "Front Page of the Internet" viewable to the non-logged in, that will be it - other than Reddit using the type of shared links we get from other platforms, that typically display a screen-filling CTA to download the app, with a tiny "View on Web/App" button buried somewhere in the background.

A change of tack

Simply put, Reddit has discovered the hard way that AI doesn't drive traffic, it takes it. Sounds familiar to people in the content game.

This is of interest because Reddit was an outlier. Essentially a forum that kept foruming, and foruming on a massive scale, for which the engine was user generated content - the holy grail of internet content, free and with a generative momentum all of its own. Its true golden period was set in train by Yishan Wong, who, despite a fairly brief period as CEO, grew the user base from 35 million to 174 million. Personally, I was a regular Reddit user until about four years ago, when it didn't survive one of my periodic mobile app purges and the feeling of ever-creeping hoops to jump through and monetisation counted against it. I felt that Reddit had lost its cool, something which felt a big part of its cultural niche.

Reddit then became one of the big names to sign deals with AI companies. It had a gigantic archive of human-authored and human-curated content, and a treasure trove of well-ordered data, all making it a dream for LLM training. OpenAI and Google both inked deals with Reddit in 2024, deciding that the collective content sweat of Reddit users' brows, given freely by them, was worth real money.

Reddit was a test case for me. I entertained the idea that Reddit, a publisher born entirely of the internet, and one uniquely driven by user content, might be different in the hands of Big AI than would a traditional publisher. This clearly hasn't been the case. CEO Huffman told CNBC recently that "I think fundamentally that relationship between Google and the rest of the internet is evolving, and so for us, this means a continued focus on our core users that come to Reddit directly."

That's the sound of the content drawbridge being drawn up and the walled garden being built, by the way.

Indeed, it's understood that continued Reddit negotiations with Google over content use for AI purposes aren't going so well, with Chief Operating Officer Jen Wong telling Bloomberg that caution was required in "viewing the [logged-in] strategy as a response to Reddit's ongoing negotiations with AI companies." Those talks, she told Bloomberg, remain "complicated."

"There’s a wide range of outcomes, including, if it’s strategic, to not renew a partnership," she said.

Recall that it was only just over two years ago that internet-native publisher Reddit entered the embrace of those wanting content for their AI systems, and already it seems they are backing away from that embrace. It's a telling moment that indicates a change in currents, if not in the tide just yet. 

We're in a content world on fast forward, and Reddit, so keen in the past to freely welcome publisher content into its own, is now forced to become as protective as the rest of us of what it offers to its users, for much the same reason.