Reddit CEO delivers bold warning to Google and OpenAI

Reddit CEO Steve Huffman had a message for the AI giants on the company's first-quarter 2026 earnings call. And it wasn't subtle."There is no artificial intelligence without actual intelligence. And that comes from Reddit," Huffman said.That single line landed like a warning shot, aimed squarely at Google and OpenAI, two of Reddit's (RDDT) most important licensing partners. And given what the platform reported for the quarter, Huffman had every reason to say it with confidence.Reddit's Q1 numbers were solidValued at amarket cap of $32 billion, Reddit stock went public in March 2024 at $34 per share, CNBC noted. Today, the social media stock trades around $166.In Q1 of 2206, it reported:Revenue of $663 million, up 69% year over year and above consensus estimates of $611 million, as indicated by CNBC.Net income of $204 million or $1.01 per share, beating estimates by $0.43 per share, CNBC reported. In the year-ago period, RDDT reportedadjusted earnings of $0.13 per share. It also marked Reddit's seventh straight quarter of revenue growth above 60%. The company posted a 91.5% gross margin and a 40% adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, both rare metrics for a company growing this fast.Free cash flow margin rose to 47%, while it allocated just $1 million towards capital expenditures, showcasing its asset-light business model. Reddit also raised its guidance. For the second quarter of 2026, the company is projecting revenue of $715 million to $725 million, ahead of the $712 million analysts had penciled in. Related: Young Adults Rely on Social Media for Financial AdviceAdjusted EBITDA is expected to land between $285 million and $295 million, also above estimates.RDDT stock rose 8% in the past week and 43% in the last 12 months. Why Google and OpenAI should pay attentionReddit's financial strength is a story about data and who controls it.Huffman made it clear on the call that Reddit's 20-plus years of human conversations, totaling more than 25 billion posts and comments, are a key part of the infrastructure for the AI era."Reddit's conversations are like oil for the modern internet," Huffman said — a foundational resource that AI models depend on to learn, reason, and generate responses.Reddit currently has licensing deals with both Google and OpenAI. One analyst on the call noted that those deals appear to be worth between $50 million and $60 million annually and questioned whether that's nearly enough, given Reddit's growing importance to AI development.Huffman largely agreed with the premise. When asked about the upcoming 2027 renewals for those partnerships, he stopped short of naming figures. But his message was clear: The world can see that Reddit's data is valuable, and so can its partners.He also declined to rule out exclusive arrangements. When asked whether an exclusive deal with one AI company might make sense, Huffman simply said, "No comment." Reddit's CEO is optimistic on the company's AI moat.Spencer Platt/Getty Images Reddit aims to expand its user baseFor all the earnings momentum, Huffman was candid about where Reddit is still falling short.The platform has roughly 500 million weekly users globally, including 200 million in the United States. But daily active users (DAUs) in the U.S. sit at around 50 million. Huffman's stated goal is to reach 100 million U.S. DAUs, and he called it the company's top internal priority.If 200 million Americans use Reddit each week but only 50 million show up daily, the conversion opportunity is enormous. The challenge is getting occasional visitors to come back every day.Huffman pointed to three main levers: better onboarding for new users, a faster app on both iOS and Android, and a smarter content feed powered by machine learning. He's been bringing in experienced talent from platforms that have already cracked the daily engagement code, and he believes Reddit is on a similar path.More Tech Stocks:Morgan Stanley sets jaw-dropping Micron price target after eventNvidia’s China chip problem isn’t what most investors thinkQuantum Computing makes $110 million move nobody saw comingSearch weekly active users (WAUs) are up30% year over year, and the team has rolled out an AI-powered answer feature that can now compare products, pull relevant links, and behave more like an intelligent assistant than a keyword tool.On the advertising side, Reddit's new automated campaign tool, Reddit Max, is gaining traction fast. Advertisers using it are seeing an average 17% drop in cost per action and 25% higher conversion rates. About half of Max campaign users are also adopting AI-powered creative tools, a sign that automation is landing well with the advertiser base.Active advertisers grew by more than 75% year over year, significantly diversifying the revenue base. What is the RDDT stock price target?Analysts tracking Redditforecast revenue to increase from $2.20 billion in 2025 to $7.75 billion in 2030. In this period, free cash flow is projected to expand from $680 million to $3.15 billion. If RDDT stock is priced at 25x forward FCF, which is below its 1-year average of 40x, it should gain 150% over the next 4 years. Out of the 24 analysts covering RDDT stock, 14 recommend “buy,” nine recommend “hold,” and one recommends “sell”. The average Reddit stock price target is $222, indicating a 33% upside from current levels. Reddit's momentum is real. The question now is whether its AI partners will pay what that momentum is worth.Related: Reddit insider sends major vote of confidence after earnings