Reddit CEO Warns Google AI Features Are Reducing Traffic and Impacting Revenue

During Reddit's Q3 2026 earnings call, CEO Steve Huffman expressed concerns that Google's AI-powered search features are diminishing the platform's referral traffic. He noted that these features, which provide direct answers to users, are reshaping the search experience and reducing the number of visitors directed to Reddit.

Huffman reported a loss of over 1 million search referrals weekly in October, attributing this decline to Google's AI Mode and AI Overviews. Despite a 53% increase in revenue to $895 million, the company faced a 30% drop in shares following the announcement, as investors reacted to the traffic concerns and weaker fourth-quarter revenue guidance.

While Reddit's global daily active users rose by 12% year-over-year, the platform saw a 2% decline in US daily active unique users, marking the first decrease since going public in 2024. Huffman emphasized that the demand for Reddit content remains high, but it is increasingly being consumed elsewhere due to the changes in Google's search dynamics.

In response to these challenges, Reddit plans to test a primarily logged-in user experience in select markets outside the US, as logged-in users contribute significantly to monetization. The company is also pursuing licensing agreements with AI firms and enhancing its own AI-powered search tools to engage users more effectively.

The implications of these developments extend beyond Reddit, raising concerns for various online publishers and platforms that rely on traditional search traffic, as the landscape shifts due to AI advancements.