Reddit is moving to a mostly logged-in experience. The company announced the shift on its third-quarter earnings call on Thursday, according to TechCrunch AI. Reddit gave two reasons. It wants to keep AI companies from scraping its data so it can sell that data through licensing deals instead, and it wants more revenue at a time when it’s losing U.S. users.
This is one of the clearest signs yet that AI search is changing how the web’s biggest content sites operate.
📌 Key Takeaways
- What: Reddit will make being logged in the default way to use the site. Tests start in select markets outside the U.S. in Q4.
- Why: Search referrals are falling fast as AI summaries answer questions without sending people to websites.
- Money angle: Logged-in users are worth more to advertisers, and a closed-off site makes AI licensing deals more valuable.
- Timeline: There’s no date yet for a global rollout.
- What stays: A logged-out front page, anonymity, and an “incognito mode” that’s being rebuilt.
📉 The Traffic Problem
For years, Google sent Reddit a steady flow of visitors. Many people even typed “Reddit” at the end of their searches to get answers from real humans. AI-powered search is cutting off that flow.
TechCrunch AI reports that Reddit’s search referrals dropped by more than 1 million per week on average in October. Here’s how the user numbers look:
- Global daily active users were flat quarter over quarter at 130.3 million.
- U.S. daily active users fell from 53.2 million in Q2 to 50.7 million in Q3.
- U.S. users were down 2% year over year.
Reddit also warned that daily active users could fall by a low double-digit percentage next quarter if the trend continues. A 10% to 12% drop would bring it down to roughly 115 to 117 million. That’s a big loss for a platform whose whole pitch is scale.
💰 The Revenue Story
Reddit’s revenue keeps growing even as its user numbers stall:
- Revenue: up 53% year over year to $895 million, ahead of the roughly $875 million Wall Street expected
- Net income: up 74% to $283 million
- Ad revenue: up 54% to $847 million
- Non-ad revenue (including AI data licensing): up 35% to $48 million
- U.S. revenue per daily user: up 53% to $13.82
- Global revenue per daily user: up 36% to $6.87
That’s why the logged-in shift makes business sense. A visitor who arrives from a Google search and leaves tells Reddit almost nothing. A logged-in user shows what they like and how they behave, so Reddit can target ads better and charge more for them. Those same signals also power personalized feeds, community recommendations, and Reddit’s new algorithmic “For You” feed, which it announced a day earlier.
🤖 Why AI Builders Should Pay Attention
The licensing angle is the part that matters most for AI. Reddit’s data is a big reason chatbots can answer niche questions in a human tone. If AI companies can’t scrape that data for free, they’ll have to pay for it.
I think this is a sign that open training data is getting scarcer. When a site this big puts its content behind a login, other publishers notice. Expect three things:
- Higher data costs for model providers that rely on forum-style, human-written content.
- More publishers following Reddit’s lead, especially those whose search traffic is already shrinking.
- A growing gap between AI labs that can afford licensing deals and smaller players that can’t.
Reddit isn’t alone here. TechCrunch AI notes that falling click-throughs have now hit most publishers, and they’re even showing up in Google’s own earnings.
🗣️ Huffman’s Take
Co-founder and CEO Steve Huffman admitted the decision wasn’t easy.
“I don’t know about you, but as someone whose life has been defined by the open internet, it’s a big change for me,” he wrote in a post on Reddit. “But I’ve come to the conclusion that this is the right decision for our platform and the right decision for our business.”
He also said a lot is still undecided:
“There are still plenty of questions that are unanswered, particularly around where the boundaries should be between logged-in and logged-out experiences.”
🔭 What Comes Next
The Q4 tests outside the U.S. will show how much logged-out traffic Reddit can lose before ad revenue and licensing gains stop making up for it. If the tests go well, the open web’s best-known Q&A source gets a lot harder to reach for both search engines and AI crawlers. More details are in the original TechCrunch AI report.