Reddit Inc.’s shares took a sharp dive on Wednesday, plummeting more than 10% in early trading, as investors reacted to emerging data showing a significant decline in references to Reddit content within responses generated by OpenAI’s ChatGPT. This development has raised fresh concerns about the sustainability of Reddit’s lucrative data-licensing deals with artificial intelligence companies, which have been a cornerstone of its growth narrative since going public.

According to analytics from Similarweb, citations of Reddit in ChatGPT outputs dropped precipitously from over 14% in early September to around 2% by the end of the month. This shift coincides with OpenAI’s aggressive push to expand its user base, recently reporting that ChatGPT has reached 700 million weekly active users, a fourfold increase from the previous year, as detailed in a CNBC report.

Shifting Dynamics in AI Data Sourcing

The plunge in Reddit references suggests that OpenAI may be diversifying its data sources or refining its models to rely less on Reddit’s user-generated content, which has long been prized for its real-time discussions and niche expertise. This comes at a time when Reddit has positioned itself as an essential data provider for AI training, securing high-profile partnerships including a deal with OpenAI itself, valued at potentially hundreds of millions annually.

However, the data from Similarweb, highlighted in a recent Invezz article, indicates that while Reddit remains the most cited social platform in ChatGPT responses at about 4.3% overall in September, the downward trend could erode traffic referrals and diminish the perceived value of its content corpus. Investors are now questioning whether this signals a broader reevaluation of Reddit’s role in the AI ecosystem.

OpenAI’s Revenue Surge and Strategic Moves

OpenAI, meanwhile, continues to demonstrate robust financial health, with first-half 2025 revenue climbing 16% to $4.3 billion, driven largely by ChatGPT’s explosive user growth and enterprise API adoption, as reported by Reuters. This growth trajectory has propelled OpenAI’s annualized revenue run rate to $12 billion, even as it contends with substantial R&D expenditures exceeding $2.5 billion.

Sentiment on social platforms like X reflects a mix of concern and optimism; posts from users such as those tracked on X highlight Reddit’s stock sliding amid speculation that reduced ChatGPT reliance could impact its high-margin AI licensing revenue, with one noting a pre-market drop of 11.3%. Yet, some analysts point to Reddit’s own AI initiatives, including new ad tools that leverage viral posts, which contributed to a 6% share rise earlier this year, per insights from Nasdaq.

Implications for Reddit’s Business Model

Reddit’s stock performance has been volatile since its IPO, with shares up over 50% year-to-date prior to this week’s tumble, fueled by advertising growth and AI-related optimism. A Nasdaq analysis earlier this year emphasized how enhanced user engagement and AI-driven advertising could bolster long-term prospects, but the current downturn underscores vulnerabilities tied to external AI dependencies.

Industry insiders are watching closely as Reddit explores dynamic pricing for its data and expands partnerships, such as with Google. Data from Aitechtonic shows ChatGPT’s global user base expanding rapidly, potentially pressuring platforms like Reddit to innovate beyond mere data provision. If OpenAI’s models continue to de-emphasize Reddit content, it could force a pivot toward internal AI applications to sustain revenue momentum.

Broader Tech Sector Ramifications

The interplay between Reddit and OpenAI exemplifies the evolving tensions in the tech sector, where data scarcity and quality are paramount for AI advancement. Posts on X from market watchers, including those discussing Reddit’s chart strength and AI ad integrations, suggest that while short-term pain is evident, Reddit’s position as the eighth most visited website globally—trailing giants like YouTube and ChatGPT itself—provides a resilient foundation.

Looking ahead, analysts from Wall Street Pit argue that strategic deals and a focus on monetizing user-generated content through AI could mitigate risks. With OpenAI’s revenue hitting $10 billion in annualized recurring figures earlier this year, as per CNBC, the pressure is on for Reddit to demonstrate that its content remains indispensable. For now, the stock’s slide serves as a cautionary tale about the fragility of AI-driven valuations in an era of rapid technological shifts.