Reddit Weighs Ending $60M Google Data Deal as AI Overviews Cannibalize Web Traffic
Key Takeaways
- ▸Reddit is reconsidering its $60M annual data licensing deal with Google due to traffic losses from AI Overviews, which reduce click-through rates by ~60%
- ▸Major publishers (USA Today, CNN, Business Insider) have experienced traffic declines of 23-85% as AI summaries eliminate the need to visit original sources
- ▸Publishers currently have no way to block generative AI training without blocking traditional search indexing—a regulatory gap the UK's CMA is addressing
Summary
Reddit is reportedly reconsidering its renewal of a $60 million-per-year data licensing agreement with Google, signed in 2024, as the company faces pressure from declining referral traffic caused by Google's AI Overviews. The AI-powered summaries appear directly on search results, eliminating users' need to click through to original sources—a shift that has devastated web publishers across the industry, with USA Today, CNN, Politico, and Business Insider experiencing traffic declines ranging from 23% to over 85% between June 2025 and 2026.
The move reflects growing frustration among content creators over AI companies' ability to monetize data through training agreements while their generative AI products simultaneously reduce traffic to original sources. Chartbeat reported that AI summaries reduce click-through rates by approximately 60%, meaning Reddit executives are weighing the value of continued data sharing against the platform's own traffic losses. Other major publishers, including Reuters and Politico, are similarly considering blocking Google access or implementing registration walls to restrict data availability.
The situation highlights a regulatory inflection point in the AI industry. The UK's Competition and Markets Authority recently ordered Google to allow publishers to opt out of AI summaries without losing traditional search positioning—a ruling the company must implement within nine months. Meanwhile, Reddit continues to cultivate parallel deals with OpenAI ($70M annually) and faces legal action against Perplexity for allegedly scraping its data without authorization, underscoring the tension between data monetization and platform protection.
- Reddit's strategy reflects a broader industry shift toward data monetization through selective partnerships while simultaneously protecting referral traffic
- Competing AI partnerships (OpenAI deal, Perplexity litigation) suggest Reddit is diversifying its AI revenue while reducing dependence on Google
