Reddit CEO says Google’s AI features are cutting referrals to the platform

For two decades, the internet ran on a simple bargain. Websites let Google index their content, and Google sent visitors back in return.

Reddit CEO Steve Huffman says that bargain is breaking. His message: AI is cutting the traffic search engines send to websites, and the traditional internet business model is taking the hit.

He has the numbers to back it up. Speaking on Reddit’s Q3 2026 earnings call on October 29, Huffman said Google’s AI Mode and AI Overviews drove a drop of over 1 million search referrals per week in October.

Strong revenue, shaky traffic

The awkward part is that Reddit’s business is, by most measures, booming. Q3 2026 revenue climbed 53% to $895 million, which the company frames as an annualized total of $3 billion.

Guidance looked healthy too. Reddit projected Q4 revenue between $1.0 billion and $1.03 billion.

Global daily active users also rose 12% year-over-year to 130.3 million.

The problem sits closer to home. US daily active unique users fell 2% year-over-year to 50.7 million.

That marks the first decline in that metric since Reddit went public in 2024. For a company that sells ads largely to US marketers, a shrinking domestic audience is not a footnote.

Investors noticed. Reddit shares fell by up to 18% in after-hours trading as traffic concerns overshadowed the revenue beat.

Why Google’s AI features matter so much

Huffman described this as a transformation that has reduced Google’s role as a traffic driver for Reddit. The search giant used to be a referral engine. It is increasingly becoming a destination in its own right.

Huffman nonetheless emphasized that demand for Reddit content remains high. The demand has not vanished. It is simply being consumed somewhere else.

Reddit’s countermove: log in, please

Reddit is not waiting for Google to restore the old arrangement. The company announced plans to test a primarily logged-in experience in select markets outside the US.

The logic is straightforward. Logged-in users account for more than 80% of Reddit’s monetization.

Reddit is pairing that defense with offense. The company is pursuing licensing agreements with AI players such as OpenAI and Google, while also taking legal action against screen scrapers.

The company is also leaning on its own AI-powered search tools and direct user engagement.

What this means for Reddit and the wider web

For Reddit shareholders, the central question is whether the platform can grow revenue faster than it loses search-driven visitors. So far, the answer looks like yes, with the 53% revenue jump as the main evidence.

But the US user decline is a warning light. If logged-out search traffic keeps shrinking, Reddit has to convert more casual readers into signed-in users.

The logged-in test carries real risk. Login walls can push away the drive-by visitors who sometimes become loyal users, and Reddit is testing it outside the US first, which suggests some caution about its home market.

Licensing is the other lever to watch. Deals with AI companies turn Reddit’s archive into a recurring revenue stream that does not depend on clicks at all.

The broader implications reach well beyond one company. Publishers, forums, review sites, and recipe blogs have all relied on the same search-for-traffic trade that Huffman says is now eroding.

Reddit is large enough to negotiate licensing deals and sue scrapers. Smaller websites mostly are not, which raises uncomfortable questions about how they fund content that AI summaries draw upon.