Reddit CEO Steve Huffman warns AI search could slash traffic and ad revenue

Reddit reported strong second‑quarter 2026 financial results, yet its shares fell about 10 % after CEO Steve Huffman warned that AI‑driven search overviews are rapidly cutting referral traffic. He said the rise of AI summaries—exemplified by Google’s new AI overview feature—allows users to get answers without clicking through to external sites, diminishing the “ten blue links” model that has long driven traffic to platforms like Reddit.

The shift threatens Reddit’s ad‑based revenue, as fewer visitors arrive from search engines. Despite the risk, Reddit earns roughly $43 million from licensing its data to AI developers such as Google and OpenAI. To mitigate reliance on external search, the company plans to enhance its own search tools, improve recommendation algorithms, and consider restricting access to certain content if search operators do not offer fair compensation. U.S. daily unique users slipped slightly from 53.5 million in Q1 to 53.2 million in Q2, underscoring the growing impact of AI on user behavior.