On Wednesday Reddit closed at $170.38, down 8.32%, losing roughly $3 billion of market value. The trigger was a Wall Street Journal story reporting that Reddit executives have internally discussed cutting off Google’s access to Reddit content for AI training.
The contract pays about $60 million a year and the talks are still open, per people familiar with the negotiations. No decision has been made yet.
We think the market got this selloff wrong. The stock moved by roughly 50x the annual value of a deal that, based on the Journal’s own reporting, looks more likely to be renewed at a higher price than killed. Wednesday’s reaction treated Reddit like just another publisher losing traffic to AI but Reddit is renegotiating with the customer, rather than losing him.
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Reddit was one of six companies described in the piece. There were also:
USA Today,
Politico,
Reuters,
The Economist and
People Inc.
They’re all rethinking whether to keep supplying Google with content because their search referral traffic is collapsing. Reddit’s complaint is different because they have a $60 million annual contract for AI training rights, and the fight is over whether that price still reflects what Google is getting.
On top of that contract, Google also crawls reddit.com through a Googlebot that indexes pages so Reddit threads show up in search results. Reddit’s compensation for that second arrangement was always informal, with only the referral traffic from people clicking those results back to the site.
That worked for 20 years, and then Google started putting AI generated summaries at the top of the search page and the clicks stopped coming back at the same rate.
There are two separate crawls running between Google and Reddit and WSJ only talks about one of them.
The training crawl, which gives Google permission to use Reddit data for building AI models.
The search crawl is separate. Googlebot uses it to index pages for regular search results, and AI Overviews run on it too. Blocking it means your site vanishes from Google completely.
Even without the training contract, Google's AI summaries would still pull Reddit content through the search crawl. The only way to cut that off would be blocking Googlebot entirely and disappearing from Google search, which nobody in the article has done.
Pew Research went through almost 69 thousand Google searches in July 2025.
With an AI summary present, 8% of users clicked through to a regular result. Without one, 15% did. The traffic that Google used to send back to Reddit has been falling since AI Overviews rolled out, and the $60 million price tag was locked in before anyone realized how much would disappear.
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