Reddit Faces AI Search Headwinds as Google Rolls Out ‘AI Mode’

Google’s new AI mode could spell trouble for Reddit, after the stocks of Reddit fell by 5% on monday after Well Fargo predicted that Reddit's traffic will drop as Google more aggressively implements AI features in search.

This isn't the first time changes to Gooigle's search feature caused Reddit's stock to fall; the company's shares fell by over 15% in February after Google tweaked its search algorithm.

AI mode is Google's latest effort to offer users a more conversational experience. This means that instead of clicking on links like before, users can just converse and get answers from the Google AI.

Experts say that features like this would greatly affect the logged-out users-Reddit's more casual visitors who does not own an account on Reddit-because they can now obtain their answers without even having to access the platform.

Conversely, it would have little impact on its logged-in users, who would still continue to patronise platforms regardless of this new feature.

Experts believe that because most of Reddit's growth depends on its logged-out users who access the platform through google search, hence this feature would have a much longer lasting and deep impact on the platform.

Despite the warning signs, Reddit’s leadership remains optimistic. COO Jen Wong noted that the platform’s core strength lies in its logged-in user base, who spend significantly more time on the platform and drive the majority of impressions and ad revenue.

“A lot of our product work focuses on nurturing those logged-in users, which form the bedrock of our engagement and monetization. It’s not existential for us. The business is healthy and built around deep user interaction.”

Reddit is also developing its own AI-powered search tool called Reddit Answers, which delivers curated responses sourced directly from user-generated content.

CEO Huffman believes that Reddit can thrive in the AI era by emphasizing what makes it unique: unfiltered, diverse, and community-driven perspectives.

“There’s no question LLMs will reshape how we search online—and that’s exciting. Sometimes, people want quick, sanitized answers from AI. But often, they crave the nuanced, authentic, and even messy dialogue that only Reddit communities can provide.”