Reddit CEO takes aim at Google AI Overviews despite earnings beat
Steve Huffman challenges Google as Reddit weighs ending its $60m licensing deal
Reddit's revenue climbed 61% to $804.9 million in the second quarter, comfortably beating analyst expectations. Yet shares fell more than 20% after the earnings report, as CEO Steve Huffman used the moment to challenge Google's AI Overviews feature directly, warning that search referral traffic had turned "choppy".
According to a letter Huffman wrote to Reddit’s investors, what AI systems remove is the essence of Reddit’s worth. "As the internet becomes flooded with synthetic content, people are craving real human perspective," Huffman writes, adding that Reddit is all about “deeper discussion, heated debate, and authentic experience” as opposed to an AI summary.
In remarks around the earnings call, he was blunter still: "10 blue links have driven tremendous value and growth to the broader ecosystem... AI Overviews has yet to make a similar level of positive impact."
These developments follow a review of Reddit's data licence deal with Google, valued at about $60 million annually and signed in 2024, as reported by the Wall Street Journal.
This comes after the publication reported that other big publishers, such as The Economist, Reuters, Politico and USA Today, we're contemplating the same course of action. Reddit has another license agreement with OpenAI.
According to a Pew Research study conducted last year using information from 900 American adults, Google's AI Summaries reduced the referral traffic to external websites by nearly 50% from traditional search results.
Google has disputed the findings, telling Ars Technica the study used "a flawed methodology and skewed queryset" and later stating in a blog post that organic click volume to websites has stayed "relatively stable year-over-year".
Google has also said recent changes to AI Overviews will surface more prominent outbound links.
