Reddit Stock Drops Up to 9% as Google AI Deal Faces Non-Renewal, Publishers Weigh Cutting Google Off Too

Reddit built a real business model on renting out its user posts to Google's AI. That model is now in question, and the stock market noticed.

Shares of Reddit Inc. fell as much as 9% during trading Wednesday, according to IBTimes, after reports that the company may not renew its licensing deal with Google. The stock is down more than 25% so far this year. Quiver Quantitative's analysis pointed to investor concern over the deal's renewal timing, made worse by caution ahead of Reddit's second-quarter earnings, scheduled for release after market close on July 30, 2026.

The deal in question dates back to 2024, when Reddit agreed to let Google train its AI models on Reddit's user-generated conversations for roughly $60 million a year, according to CNBC reporting cited by IBTimes. Reddit CEO Steve Huffman called the Google and OpenAI partnerships "very meaningful" at the time. Those deals, alongside a similar arrangement with OpenAI, helped Reddit post 69% year-over-year revenue growth last quarter.

Now Reddit is reportedly reconsidering whether the arrangement still makes sense, according to the Wall Street Journal, because Google's AI Overviews are answering user questions with Reddit's own content without sending readers back to Reddit's site. TechSpot reported that Reddit and Google are currently negotiating a possible renewal, and that Reddit has discussed blocking Google from using its posts for AI purposes altogether.

Reddit isn't the only one rethinking the Google relationship

The New York Post reported that USA Today, Politico, Reuters and The Economist are all reconsidering how much access they give Google's crawlers, citing the Wall Street Journal's sourcing. USA Today Co. CEO Mike Reed put it bluntly: "It's time to take a stand and say enough is enough."

The traffic numbers explain why. Semrush data cited by both the New York Post and TechSpot shows Google search traffic from U.S. users to USA Today fell by nearly half between June 2025 and June 2026. Politico's traffic dropped 23%. CNN lost about 25%. Business Insider's organic Google traffic collapsed more than 85% over the same period.

USA Today is already suing Google over alleged monopoly practices in digital advertising technology, and the company is now weighing whether to block Google's access to its articles for AI training entirely, which would also pull its content out of search results. Politico, owned by Axel Springer, has discussed blocking Google and other bots from non-paywalled content. Reuters President Paul Bascobert told the Journal: "We are certainly looking at the economic trade-offs between search and AI summaries."

Chegg sued Google last year making a similar claim, that AI Overviews gutted its revenue by answering questions directly instead of driving clicks to its site.

Google's defense, and the real bind publishers are in

Google's position is that this is overblown. A company spokesperson told the Journal that "Google's AI Search features send billions of clicks to the web every week," and that the company "offers clear controls for website owners to manage their content."

Google's argument has merit. Publishers genuinely can opt out of having their content used to train Gemini through a tool called Google-Extended, without necessarily disappearing from search entirely. Google has also started paying more than 200 publishers for AI access, per TechSpot's reporting.

But the opt-out system has a catch that TechSpot laid out clearly. Blocking AI Overviews specifically, as opposed to Gemini training, risks losing visibility in regular search results too. There isn't a clean lever publishers can pull to keep their search traffic while refusing to feed the AI summaries that are cannibalizing it. More aggressive tools like "noindex" pull pages from Google altogether; "nosnippet" can also tank visibility.

This is exactly why the UK's Competition and Markets Authority ordered Google last month to let publishers opt out of AI search features without losing their normal search placement. Google says it will test that fix in Britain first, with no timeline given for a global rollout, according to TechSpot.

According to a Pew Research Center study cited by TechSpot, users click a traditional link in 15% of searches without an AI Overview present. That falls to 8% when an Overview shows up. Links embedded inside the AI summary itself get clicked in just 1% of searches.

For an industry that runs on ad-supported click traffic, those are brutal numbers. Whether publishers actually follow through on cutting Google off, or whether the threat is leverage for renegotiating deals like Reddit's, is still an open question. Reddit's earnings release on July 30 will be the next concrete data point on whether the traffic worries are showing up in the company's actual numbers, not just its stock price.