On July 22, Reddit fell 7.33% in regular trading, trading at $173.195/share, with turnover of $111 million. The decline was triggered by reports that Reddit is reconsidering its content licensing relationship with Google amid growing concerns over AI search eroding platform traffic.

According to reports, Reddit management has discussed cutting off Google's ability to access its content for AI purposes. Reddit signed a $60 million-per-year content licensing agreement with Google in 2024, allowing Google to use Reddit content for AI model training. However, as users increasingly turn to AI-powered search tools instead of browsing Reddit forums directly, the company is reassessing whether continuing to supply content to Google remains beneficial. The existing agreement is nearing expiration, and negotiations over renewal are underway.

The market had previously anticipated the renewal could significantly increase to $300-500 million annually, given Reddit's high citation rate in AI search results. RBC Capital Markets had noted in May that Google's AI search updates improving link visibility could support a favorable renewal outcome. The current reports suggesting Reddit may not renew — or may restrict access — represent a material shift from those bullish expectations, creating near-term uncertainty ahead of the company's next earnings report on July 30.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)