Reddit finally takes its API war where it belongs: to AI companies

Reddit ignited a war this year. Dramatic changes in API access pricing (from free to unaffordable) was one of its most polarizing moves ever. It resulted in apps beloved by long-time Reddit users, including moderators and people with accessibility needs, closing shop. Community trust was sacrificed, too. Disgusted with Reddit for how it handled third-party apps, abruptly ushered in pricing changes, and treated moderators who protested, numerous valuable, knowledgeable users quit the platform.

Originally, Reddit framed its API pricing changes as a way to prevent generative AI companies from using Reddit data to train large language models (LLMs) without Reddit getting anything in return. With Reddit no longer dealing with small third-party developers—all of which are now either paying Reddit or getting some sort of exemption—Reddit is reportedly taking the fight to where it should have been focused the entire time: generative AI firms.

Can Reddit survive without search?

On Friday, The Washington Post, as spotted by The Verge, said Reddit "has met with top generative AI companies about being paid for its data," citing an anonymous source.

Going further, The Washington Post reported that Reddit is ready to play hard ball:

If a deal can’t be reached, Reddit is considering blocking search crawlers from Google and Bing, which would prevent the forum from being discovered in searches and reduce the number of visitors to the site. But the company believes the trade-off would be worth it, the person said, adding: “Reddit can survive without search.”

It sounds like a drastic, if not unrealistic, move, but these are drastic, if not surreal, times. The generative AI boom has been so breakneck that companies everywhere are now scrambling to figure out how the technology can best be monetized to favor their best interests.

At first, we might have thought that Reddit would only consider blocking AI crawlers, but The Washington Post's report specifically states "search crawlers." And Google and OpenAI have already released ways to block their AI data crawlers.

This suggests that Reddit's reported threat to block Google and Bing isn't just about protecting Reddit data from being used freely to train AI, but also about giving Reddit an advantage in the overall negotiations.

Google has already had a taste of what a Reddit-free Google might look like. In June, thousands of subreddits went dark, read-only, or only allowed joke posts that included but were not limited to John Oliver. This made the strategy of appending "Reddit" to Google search terms useless, and this was reportedly noticed by Google.

That month, CNBC cited an audio recording of a company meeting where Google SVP Prabhakar Raghavan was asked about Reddit protests impacting search results. The executive reportedly conceded that Google users were unhappy.

“Many of you may wonder how we have a search team that’s iterating and building all this new stuff and yet somehow, users are still not quite happy,” Raghavan said at the time, according to CNBC.

Google seemingly knows that its users are interested in Reddit results because they provide real human answers and insight. This has become particularly valuable as Google's search results have become more sponsor-driven over the years and as unreliable sites game SEO. Demand for real human voices is why Google launched the Perspectives tab on its search engine, but that also brings up the likes of TikTok and YouTube influencers and sponsored posts. That's different from a passionate discussion giving you rare insight based on real-life experiences.

Of course, blocking search could be a bluff from Reddit. It's hard to imagine a world where Reddit's relevance remains as strong if it requires users to visit its homepage. In June, Digiday cited Similarweb as saying 49 percent of Reddit's traffic comes from search engines. That's not an unrealistic number for a modern website, but Reddit hasn't confirmed this data.

That said, Reddit has made some dire moves before. The social media firm is said to be considering an IPO this year and has been relentless lately in its pursuit to become profitable and to diversify revenue streams beyond ads. Besides forcing the closure of some of the most popular ways to access Reddit, the company recently forced personalized ads and started a user payment program similar to what social media site X (formerly Twitter) has implemented.

Taking the battle where it belongs

Reddit is one example of a company seeking to help shape how generative AI will be monetized in the coming years and how the AI boom will impact various businesses. Citing a post from Palewire, a website run by journalist and computer programmer Ben Welsh, The Washington Post's report Friday noted that at least 535 news organizations are using ChatGPT blockers. That includes The Washington Post, as well as The New York Times and Reuters.

This fight for an approach to generative AI that benefits AI firms and its data sources is a more understandable battle than the one Reddit waged against apps run by one or two developers. It's also how Reddit's API war, which impacted way more than just generative AI firms, was originally introduced.

“The Reddit corpus of data is really valuable,” Steve Huffman, Reddit founder and CEO, told The New York Times in April when Reddit announced its API changes. “But we don’t need to give all of that value to some of the largest companies in the world for free.”

Huffman pointed to the value of Reddit's data, which is constantly updated, to large language models.

He told The New York Times:

Crawling Reddit, generating value and not returning any of that value to our users is something we have a problem with. It’s a good time for us to tighten things up. We think that’s fair.

Many websites these days have a love-hate relationship with Google, where Google brings them significant traffic but can also end up influencing how the site works, so it can be considered Google-friendly.

As a site relying on user-generated content, Reddit doesn't have to consider SEO the same way news organizations do. But Reddit likely still gets a significant amount of traffic from Google. Anecdotally, I know many people who say they only end up on Reddit through Google searches, and that number of people grew after Reddit scorched its community reputation this summer. It's more plausible that Reddit is seeking a symbiotic relationship with Google, Microsoft, and other generative AI companies and that blocking search is a last-resort threat.

As generative AI brings companies many uncertainties and, in some cases, anxiety, Reddit may find some allies in its battle. As noted by The Post, there's an urgency for companies to work together to figure out how to strike favorable partnerships with generative AI companies.

"[AI firms] never, ever care about one person leaving,” Nicholas Vincent, a computing science professor at Canada's Simon Fraser University, told The Post, noting the power of news organizations and other publishers working together.

Reddit declined to comment on this story.

Advance Publications, which owns Ars Technica parent Condé Nast, is the largest shareholder in Reddit.