The news: Reddit is considering shutting off Google’s access to its content for AI model training, according to insider sources, The Wall Street Journal reported. The news sent Reddit’s stock tumbling about 9% between Wednesday and Friday.

Reddit said it’s approaching negotiations “just like any business should, by focusing on doing what’s best for Reddit,” per CNBC. The companies signed a contract worth approximately $60 million per year in 2024 that lets the search giant train its AI on Reddit content.

Reuters and Politico (which is owned by Axel Springer, our parent company) are similarly exploring limiting Google’s access to free articles or blocking its bot from consumer-facing news products, per WSJ. “We are certainly looking at the economic trade-offs between search and AI summaries,” Reuters president Paul Bascobert said.

Digging in: The effects that Google’s AI search offerings have had on traffic to websites from search results are causing Reddit and others to consider whether their deals will be renewed. Google AI Overviews have decreased publisher referral traffic by as much as 25%, per Digital Content Next, though Google refutes these claims.

Licensing revenues are being weighed against the long-term cost of losing traffic to AI-generated answers, framing content deals as a tradeoff between deal revenues and audience ownership. And while the first generation of AI content deals was about monetizing data, the next phase could be focused on protecting distribution and authority.

Reddit’s stock dip could suggest investors are questioning whether the company can replace guaranteed licensing revenues if it chooses to prioritize protecting long-term traffic and engagement. This is the challenge facing content owners: Licensing deals offer immediate value, but they may weaken the audience relationships that support advertising and subscriptions.

Implications for brands: If AI Overviews and similar tools continue to cut into referral traffic, publishers may look for higher-margin revenue streams and accelerate investments in first-party audiences, subscriptions, and logged-in experiences. Brands could see further fragmentation in where consumer discovery happens if publishers restrict AI crawlers or seek exclusive licensing arrangements.

Meanwhile, platforms like Google may need to pay more for high-quality data or rely more heavily on synthetic or first-party sources if publishers become more restrictive with access to their content.

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