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This summary covers The Economist’s August 22nd, 2026 Business article listed as Reddit's woes and published under the headline Good bot, bad bot.

Reddit’s value comes from something the internet is rapidly losing: large quantities of conversation that still feel human. Its users compare products, solve obscure problems, argue over niche interests and occasionally create the raw material for popular culture. The horror film Backrooms, for example, grew from unsettling images shared on Reddit and went on to gross \$393m from a \$10m budget.

Artificial intelligence makes that archive more valuable, but it also threatens the system that produced it. Chatbots rely heavily on Reddit’s discussions for answers while AI-generated search summaries send fewer people back to the site. Reddit must therefore find a way to charge AI companies for its content without allowing those same companies to replace the traffic on which its advertising business depends.

A valuable supply of human judgment

Reddit occupies an unusual position between a social network and a volunteer-run knowledge base. Like Instagram, it earns money from content supplied by users. Like Wikipedia, it depends on unpaid moderators to maintain thousands of communities. That arrangement can be fragile: moderators staged a strike in 2023 after Reddit began charging developers for access to its application programming interface.

The policy also prepared Reddit to sell access to much larger customers. Google and OpenAI reportedly agreed to pay \$60m and \$70m a year, respectively, to use Reddit data for training. Those deals may have been cheap. An analysis commissioned by Reddit found that the site is among the most frequently cited sources used by leading American chatbots.

Its discussions are especially useful for shopping advice. Reddit says about 40% of conversations on the platform relate to commercial activity. In communities such as r/BuyItForLife, people debate whether products are durable and try to identify sponsored posts or automated promotion. That makes the site a rare store of candid recommendations just as AI companies are looking for trustworthy material with which to build advertising and shopping services.

The referral bargain is breaking down

For years Reddit and Google had a mutually useful relationship. Reddit supplied pages full of answers, and Google search sent users to them. AI overviews weaken that exchange by presenting a synthesized answer without requiring a click through to the original discussion.

The effects are beginning to show. Reddit’s shares had fallen by roughly a third during the year despite strong quarterly results. The company blamed uneven search referrals for weaker engagement, and time spent in its app fell 8% from a year earlier. Over the same period, time spent on Instagram and TikTok rose by 6% and 4%, respectively.

Reddit can press for richer licensing agreements or use litigation to strengthen its bargaining position. It has sued Anthropic and Perplexity, alleging that they scraped its data unlawfully; both companies deny wrongdoing. A legal victory or settlement could establish that access to Reddit’s conversations must be negotiated rather than assumed.

But licensing alone does not solve the deeper problem. Reddit is also trying to reduce its dependence on search engines by attracting users directly and keeping them on the platform longer. That matters because advertising remains the core business, and ad revenue grew 64% year on year in the second quarter.

The company’s wager is that people will eventually tire of synthetic answers and seek out discussion shaped by experience, disagreement and recognizable human voices. The irony is that Reddit’s greatest competitive asset is also the material AI systems most want to absorb. Its future depends on preserving the human communities that make the archive valuable while collecting a fair price from the machines learning from them.