Reddit thrives in AI era, leveraging human content for search and revenue
Reddit is strategically positioning itself to capitalize on the increasing demand for human-generated content in the era of artificial intelligence, while also making significant inroads into the search market. The community website recently reported robust financial results, signaling a successful pivot in its business model.
For the second quarter of 2025, Reddit announced revenue of $500 million, marking a substantial 78 percent increase year-over-year. The company also turned a profit, achieving a net income of $89 million, a notable turnaround from a $10 million loss in Q2 2024.
CEO Steve Huffman stated that Reddit is uniquely suited for the current digital landscape, emphasizing the growing value of authentic human conversation and knowledge in a world where genuine connection is becoming scarce.
A key driver of Reddit’s recent financial success is its data licensing business, which caters to AI firms seeking human-authored content for model training. This segment, part of Reddit’s “other revenue” category, generated $35 million, a 24 percent increase from the previous year. Reddit has secured content partnerships with major AI players like OpenAI and Google. In a move to protect its intellectual property, the company also initiated a lawsuit against Anthropic in June, seeking to halt unauthorized content scraping.
During an investor call, Huffman acknowledged the importance of content licensing, noting that while the “Reddit Corpus”—the company’s extensive dataset of user-generated content—may not be strictly essential, its significance to leading internet companies appears to be growing. He indicated that Reddit plans to refine its partnership structures while simultaneously developing innovative products built upon its vast content base.
In a letter to investors, Huffman underscored the necessity of safeguarding the platform’s core product by preserving human authenticity. This includes ongoing efforts to combat the proliferation of AI-generated spam posts on the site.
Beyond content licensing, Reddit sees a significant opportunity in the search market, particularly as traditional web search, exemplified by Google, faces challenges from generative AI and potential antitrust actions. Huffman believes Reddit is naturally evolving into a search destination due to the breadth and depth of its community discussions.
“Every week, hundreds of millions of people come to Reddit looking for advice, and we’re turning more of that intent into active users of Reddit’s native search,” Huffman informed investors. He highlighted strong traction, with Reddit’s core search product now serving 70 million weekly users. Furthermore, “Reddit Answers,” a new feature, has seen remarkable growth, reaching 6 million users, up from 1 million last quarter.
Reddit Answers leverages generative AI to synthesize and present clear, concise answers drawn directly from real user posts and comments on Reddit, rather than merely providing a list of links. Crucially, it links back internally to the original source posts on the platform.
Reddit’s approach to search is not to directly compete with Google by indexing the entire web. Instead, it aims to differentiate itself by offering high-quality, human-curated content. This strategy is proving effective as concerns mount over the declining quality of general web search results, often attributed to the proliferation of web spam and low-quality AI-generated content. Many internet users have already adopted the practice of appending “reddit” to their Google searches to find more reliable and authentic information.
Recent research supports these concerns, indicating that as much as 24 percent of corporate press releases and 14 percent of UN press releases by late 2024 appeared to be generated by large language models. This surge in AI-generated content has led to widespread user frustration, with many online expressing their weariness of “AI slop” dominating their feeds.
If Reddit can successfully maintain its predominantly human character and effectively deter AI scrapers and spambots through its verification initiatives, the platform is well-positioned for continued growth. As Huffman observed during the earnings call, “Reddit is one of the most searched for terms on Google because users around the internet go to Google with the intention of ending up on Reddit.” This underscores Reddit’s unique and valuable position as a trusted source of authentic, human-powered information in an increasingly AI-driven digital landscape.