Reddit shares slide on reports it may not renew Google's AI content-licensing deal

Reddit shares fell sharply on July 22 after reports that the company is weighing whether to limit or decline to renew Google’s access to its content for AI training, as their licensing agreement nears expiry.

The stock dropped about 5.8% before the open and fell as much as 8.7% intraday. Reddit and Google have not publicly confirmed the deliberations.

The existing agreement, signed in 2024, is reported to be worth roughly $60 million a year and gave Google rights to use Reddit’s content – a large trove of human discussion prized as training and grounding data – for its AI systems. The reported friction ties back to a broader tension: AI-generated search summaries answer queries directly, cutting the referral traffic that content platforms like Reddit depend on.

For Reddit, the licensing revenue is both a growth story and a dependency. Walking away would protect the scarcity value of its content but forfeit a steady, high-margin payment; renewing on softer terms would concede leverage. The timing is delicate, with Reddit scheduled to report second-quarter earnings on July 30, when investors will press for detail on data-licensing revenue and any renewal talks.

None of the terms is confirmed by either company. Reports of contract deliberations often precede a renewal rather than a breakup, and a slide on a single day’s trading says more about investor nerves over Reddit’s data-licensing income than about any decision already made.