Reddit Gets Rekt (-23%) After ChatGPT Pulls the Ultimate Data Rug: “Services no longer required.”

Reddit: charges AI companies billions to scrape its content

Also Reddit: “Wait… why tf isn’t ChatGPT showing our content anymore?”

Turns out the glorified message board founded by Serena Williams’ husband (Mr. Reddit, not Mr. Olympia) just realized the existential downside of hitching its wagon to AI… sometimes the wagon leaves you behind.

Reddit (-10% ) is eating pavement for a second straight day, deepening a two-week slide that’s wiped 23% off the stock. Why? Because ChatGPT stopped name-dropping Reddit like it was a desperate SoundCloud rapper. According to Promptwatch, Reddit citations in ChatGPT answers fell off a cliff… from 14% at peak in September to just 2% by late September. To put another way: Sammie boy has left the chat.

(Source: Investing.com)

Even with the collapse, Reddit was still the top social platform cited, averaging 4.3% in September versus LinkedIn’s sad 0.4% (sorry, Gary Vee disciples). But investors don’t like “less than yesterday” numbers, especially when your whole pitch to Wall Street is “we’re the AI data gold mine.” The timing lines up a little too neatly with OpenAI’s September 12 model update. Reddit citations started vanishing right after that tweak. Coincidence? Or did ChatGPT quietly ghost Reddit? 

When asked about it, ChatGPT pretty much threw it’s GPU-powered hands up in the air and said the new guardrails may favor “authoritative” sources (translation: actual experts, not u/420stonkz), internal filters could be down-ranking user-generated content, or maybe Reddit’s data just isn’t worth the cost anymore. Tough to say. But if OpenAI silently reprioritized Wikipedia, Bloomberg, and PubMed over Reddit threads about how to keep a girlfriend, that’s a real revenue problem. Live look at the Reddit conference room right now: 

Remember, Reddit already bagged billion-dollar licensing deals with OpenAI and Google. Those contracts are supposed to guarantee its place at the AI table. And in mid-September, Bloomberg reported Reddit was negotiating dynamic pricing with Google… essentially, “pay us more if ChatGPT uses us more.” Investors loved that. The stock went up. But now usage is tanking, which makes “dynamic pricing” about as useful as a horse without legs.

Meanwhile, Reddit’s ad business (which still makes up 93% of its revenue) is humming along with 84% year-over-year growth. So at least there’s one bright spot. But Wall Street isn’t buying ads… it’s buying AI hype. And AI hype has officially left the Reddit building.

Reddit’s whole existential pitch is: “Sure, we’re messy, but Google searchers love us, and now AI needs us too.” If ChatGPT and its peers start down-ranking Reddit, that moat shrinks fast. It’s basically the nightmare scenario: Reddit got rich selling sh*tposts to AI, then AI turned around and said, “thanks, but we’re good.” If Altman and Friends no longer crave Reddit data, then Reddit is just… a free message board again. Which is tough to justify at a $20+ billion valuation.

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