Reddit's Ads Chief Is 'Intensely Debating' Whether Selling Conversations to AI Companies Wrecks the Product Advertisers Buy

Reddit’s entire pitch to advertisers is that its conversations are real. People say what they actually think in a subreddit, which makes the platform a better read on intent than a feed full of performance. Reddit also sells those same conversations to OpenAI and Google to train their models.

On July 15, Digiday reported that Reddit’s own executives are no longer sure those two businesses can coexist. Roelof van Zwol, the company’s EVP of ads monetization, said the quiet part into a reporter’s recorder:

“It’s definitely something that we’re intensely debating”

A platform is asking out loud whether its second-biggest revenue line is quietly dismantling its biggest one.

The numbers explain why the debate is worth having. Reddit’s ad business booked $690 million in the fourth quarter of 2025, up 75% year on year. The licensing business is smaller and unusually profitable. When Reddit reported its fourth-quarter 2024 results, COO Jen Wong sized it plainly:

“It’s a small part of our revenue—I’ll call it 10%. For a business of our size, that’s material, because it’s valuable revenue.”

The Google agreement alone was reported at $60 million.

So Reddit takes money from AI companies to help them answer questions, and those answers reduce the reason anyone opens Reddit. Every publisher on the open web is living the same trade. Reddit is just the first to run both sides of it at scale and admit the math might not work.

Van Zwol’s defense is a distinction worth understanding, because it’s the whole argument. Reddit licenses the posts and comments. It doesn’t hand over what it learns from watching people:

“We don’t share all that”

That’s the line the ad product stands on. Google and OpenAI get the text. Reddit keeps the behavioral signal, meaning who lingered, who clicked, who came back to a thread three times before buying. A model trained on Reddit’s content can tell you what Redditors said about a mattress. It can’t tell you which mattress shopper is close to a decision this week. Reddit’s bet is that advertisers pay for the second thing.

The bet has a weak spot. Claire Holubowskyj, senior research analyst at Enders Analysis, pointed out that Reddit’s targeting works differently from its rivals:

“Reddit’s use of interest-based rather than identity-based targeting flattens the differences in value between frequent and non-frequent users compared to other platforms”

Read that alongside the licensing deals. Reddit’s ad system is aimed at interests, and interests are largely legible in the text, which is the exact asset it sells to the AI companies. The behavioral moat is real, but it’s thinner than a moat built on knowing exactly who you are.

Advertisers, meanwhile, are not waiting for the debate to resolve. Kira Henson, director of paid social and search at the agency Good Apple, described the rush:

“This year we have more clients either who have just launched [on Reddit], or are getting ready to launch, than we’ve ever seen before”

That’s a fast turn for a platform brands avoided on principle. Rita Steinberg, VP of media at FUSE Create, remembers the old objection: “Five years ago, none of our clients were using Reddit. It was the hardest sell… Brand safety was just not there.” Some brands now put 5% to 20% of paid media budgets into it.

Here’s the mechanism nobody at Reddit can control. Google’s AI answers already cut search referrals to publishers by 33% globally in the year to November 2025. Reddit content is prime material for those answers, which is precisely why it’s worth licensing. Each licensed answer satisfies a question that used to require a visit, and a visit is where Reddit gathers the behavioral signal it says it isn’t selling. The content walks out the door. The signal that justifies the ad rate depends on people walking back in. Sell enough of the first and you erode the supply of the second, slowly, on a lag that won’t show up in a quarter.

For marketers, this is the sharpest live test of a question that applies well beyond Reddit. Every company sitting on proprietary conversations, whether that’s a community, a forum, a review corpus, or a support archive, now gets offered money to license it. The offer looks free because the asset doesn’t leave. It reproduces. And the thing you were monetizing on top of it, the reason people come to you rather than an answer box, depends on them still needing to come. It’s the same trade publishers made when they started rebuilding their sites for machines, and the same question underneath what AI is doing to content and brand.

Buying Reddit right now is still defensible, and the intent signal is genuinely better than the alternatives. Buy it with eyes open. The advantage you’re paying for depends on Reddit winning an argument it has publicly admitted it hasn’t settled, against a customer paying it $60 million a year to lose. Watch what Reddit does at the next renewal, because the price it demands will tell you which side won. If it takes the money quietly, the moat was never the plan. It was the inventory.