Reddit shares fall 12% due to reduced ChatGPT content usage, how will this affect Reddit's future revenue growth?

The deep research logic is organized as follows: 

Okay, let's tackle this question about Reddit's stock drop and its future revenue growth. The user is asking how the reduced ChatGPT content usage will affect Reddit's revenue. First, I need to gather all the relevant data from the provided references.

Looking at the references, there are several articles mentioning the drop in ChatGPT citations from Reddit. For example, Reference 1 states that Reddit's content citations dropped from 14% to 2% in September, which caused the stock to slide. References 2, 3, 4, and 5 also discuss this decline and its impact on the stock price. The key points here are the reduced citations and the potential effect on data licensing revenue.

Next, I need to consider Reddit's revenue streams. From References 1, 3, and 12, it's clear that advertising revenue is the main driver, comprising 93% of total revenue. However, licensing deals with OpenAI and Google are also significant, especially as high-margin businesses. The drop in ChatGPT citations might affect these licensing deals, but the articles mention that Reddit is in talks for dynamic pricing models with Google, which could mitigate some risks.

I should also look at the recent financial performance. Reference 12 reports Q2 2025 revenue growth of 78% YoY, with advertising up 84%. Despite the stock drop, the company's core advertising business is strong. However, the licensing revenue contribution has slowed, as noted in Reference 3. This could be a concern if the ChatGPT reliance continues to decrease.

The user's profile mentions a diversified interest in the stock market, particularly the NASDAQ Composite, which includes tech stocks. This suggests they might be interested in how Reddit's tech partnerships and AI strategies could impact their investment. The analysis should highlight both the risks (reduced citations) and opportunities (new licensing deals, international growth).

I need to structure the answer with a clear conclusion first, then break down the analysis into sections. The conclusion should state that while the short-term impact is negative, long-term growth is still viable due to advertising strength and strategic partnerships. The analysis should cover the decline in ChatGPT citations, the role of data licensing, advertising resilience, and future opportunities like dynamic pricing and international expansion.

Also, I must include the required visualizations for the "Query" references. The user mentioned the stock drop, so the visualization should be inserted after the relevant paragraph. Make sure to use the exact query from the references, which is "Reddit Stock Slides Again as ChatGPT Responses Plunge" from Reference 1.

I should avoid any markdown in the thinking process but ensure the final answer follows the specified format with tables, citations, and visualizations. Need to check all the references for any other relevant data points, like user growth or partnerships, to provide a comprehensive analysis.

Finally, the answer should be concise, using bold headings and subheadings as per the format requirements. Ensure that each point is supported by the references and that the language is professional yet engaging, incorporating emojis where appropriate.

### **Conclusion**
Reddit’s recent stock volatility due to reduced ChatGPT citations highlights short-term risks to its data licensing revenue, but its core advertising business and strategic AI partnerships position it for long-term growth. The company’s ability to diversify revenue streams and capitalize on its unique user-generated content ecosystem will be critical in navigating the evolving AI landscape.

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### **Analysis**

#### **1. Impact of ChatGPT Citation Decline**
The drop in ChatGPT citations from Reddit (from 14% to 2% in September 2025) raises concerns about its role as a key data source for AI models . While Reddit remains the top social platform cited (4.3% average in September), the decline reflects competition from other sources like Wikipedia . This could reduce licensing fees and traffic referrals, impacting its high-margin data monetization efforts .

| Metric | September 2025 (Reddit) | Competitor (Wikipedia) |
|-------------------------|---------------------------|--------------------------|
| ChatGPT Citation Share | 4.3% (avg.) | 2.7% (down from 9%) |
| Revenue Contribution | Licensing: ~150bps | N/A |

#### **2. Revenue Resilience: Advertising Dominance**
Despite AI-related risks, Reddit’s advertising business remains robust, accounting for 93% of total revenue in Q2 2025 ($465M, +84% YoY) . Its niche communities and high engagement (110.4M daily active users) make it a valuable ad platform . Recent partnerships with Aleph for international markets and dynamic pricing talks with Google further enhance its ad monetization potential .

| Revenue Stream | Q2 2025 Growth | Contribution to Total Revenue |
|-------------------------|-----------------|---------------------------------|
| Advertising | +84% | 93% |
| Licensing | Slowed | ~7% |

#### **3. Future Catalysts: AI Partnerships & Expansion**
Reddit is actively negotiating dynamic pricing deals with Google and OpenAI, tying compensation to content usage frequency . This shift could mitigate risks from declining ChatGPT citations by aligning revenue with actual AI model adoption . Additionally, its AI-driven search tools and international user growth (32% YoY in Q2 2025) position it for sustained expansion.

| Strategic Initiative | Potential Impact | Timeline |
|-------------------------|----------------------------|----------------------------|
| Dynamic Pricing Deals | Higher licensing revenue | Mid-2025 talks ongoing |
| AI Search Tools | Enhanced user engagement | Q2 2025 launch |
| International Growth | Revenue diversification | 32% YoY growth in Q2 2025 |

#### **4. Risks & Market Reaction**
The stock drop (12% in early October 2025) reflects investor skepticism about Reddit’s dependency on external AI platforms . However, its diversified revenue streams and high-margin ad business provide a buffer against short-term AI-related volatility . Long-term risks include regulatory scrutiny of AI data usage and competition from other content platforms .

| Risk Factor | Probability | Mitigation Strategy |
|-------------------------|-------------|------------------------------------|
| AI Data Competition | High | Dynamic pricing, niche content |
| Regulatory Uncertainty | Medium | Compliance with data privacy laws |

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### **Conclusion**
Reddit’s reduced ChatGPT citations pose a near-term challenge to its data licensing revenue, but its dominant advertising business and strategic AI partnerships position it for continued growth. Investors should monitor its progress in dynamic pricing deals and international expansion as key indicators of long-term success.

|code|Ticker|Name|Date|Closing Price|market_code|
|---|---|---|---|---|---|
|RDDT|RDDT.N|Reddit|20251002|202.555|169|