Reddit Believes in Humans Over AI… But With Shares Down 13%, Wall Street Isn’t So Sure

The other day, I was listening to Bernie Sanders on Joe Rogan’s podcast, and somewhere between the usual jabs at billionaires and Bernie talking about how everyone should get a check from the government, they started talking about AI. Specifically, how it’s not only coming for truckers and factory workers… it’s coming for everyone. Coders, accountants, HR reps, maybe even Joe’s interns (Pretty soon we’ll hear “pull it up, Jarvis” instead of “pull it up, Jamie.” And Jarvis won’t ask for PTO.)

Bernie didn’t exactly shout “the robots are rising” in his Vermont accent, but the vibe was clear that if you think your desk job is safe because it involves typing instead of lifting, you better make sure you actually have some skills that make you valuable. And as I sat there trying to decide whether I was more worried about AI stealing jobs or about Bernie figuring out what a GPU is, it hit me… if any company should be freaking out about AI, it’s Reddit.

You know Reddit. The front page of the internet. The forum we all hit up when we want real answers from real people… like which credit card points are actually worth it, whether it’s okay to microwave salmon in the office, or if your girlfriend saying “it’s fine” actually means you’re not. Now 20 years old (which is 200 in internet years), Reddit is dealing with the uncomfortable reality that the thing we all use to ask questions (AI) might be the thing that replaces them entirely.

Now to combat this… Reddit recently filed a lawsuit against Anthropic, the AI company behind Claude, accusing them of scraping Reddit threads without permission and using the content to train their chatbot. Meaning: they used Reddit’s user-generated content (which Reddit makes money from) to improve their own product… without giving Reddit a dime. Naturally, Reddit’s CEO Steve Huffman isn’t thrilled. On a podcast, he laid it out clearly: “Commercial use requires commercial terms.”

Translation: if you’re building a billion-dollar business on Reddit’s back, you better cut a check. (And no, upvotes don’t count as currency.) Now, to be clear, Reddit isn’t trying to shut AI down. In fact, it’s very much playing ball. The company has already struck licensing deals with OpenAI and Google. In other words: Reddit is happy to help train your chatbot… as long as there’s a direct deposit involved.

For instance, back in December, Reddit launched its own AI tool: Reddit Answers. It’s a chatbot powered by OpenAI and Google that only pulls from Reddit’s own threads. Unlike your typical chatbot that gives you the digital equivalent of useless elevator music, Reddit Answers spits out summaries based on actual Reddit discussions… then links you to the thread so you can dive into the valuable chaos yourself. Over 1 million people are already using it every week. Even with AI chomping away at the open web, Reddit remains a great business model. It has 108 million daily users across more than 100,000 active communities.

And here’s the part advertisers really care about: Reddit may be home to comic book debates and printer ink conspiracies, but it’s also a treasure chest of purchase intent. It’s where people actively research ski gear, compare laptops, and crowdsource opinions on home gym setups… in other words, they show up ready to spend.

And while the site might look a little dated (on purpose), its old-school structure is actually a strength. It’s text-heavy, identity-light, and built around trust. You don’t go viral for a dance… you go viral for explaining the optimal way to remove hard water stains from a glass shower door. That said, Reddit’s threading a very 2024 needle: protect its human-first brand while licensing the same content to the AI overlords it’s suing.

It’s hoping that in a world full of AI-generated summaries and sterile chatbot replies, users will still crave messy, emotional, flawed human conversation. As Huffman put it: “There will always be a desire for people to talk to people about stuff.” I hope he’s right.

But the problem is while all of that sounds great… Reddit’s stock is down 13% this year and investors seem uncertain whether Reddit can actually monetize its content faster than AI companies can scrape it, repackage it, and feed it back to users with a smile (and zero personality). Authenticity might win the long game. But Wall Street’s watching the scoreboard, and right now they’re down 3 runs in the bottom of the 5th. I guess we’ll see if they’ve got a comeback in them.

At the time of publishing this article, Stocks.News holds positions in Google as mentioned in the article.