Investing.com — Reddit is increasingly positioned as a key beneficiary of the shift from traditional search toward AI-generated answers, according to a recent analysis by brokerage Needham.
As search queries are replaced by AI answers, economic value is moving away from links and toward the sources cited by large language models (LLMs).
In that context, Needham analyst Laura Martin says Reddit is emerging as “the new homepage for the Open Internet,” given its outsized presence in AI citations and growing role in consumer discovery.
The core change that Martin highlights is the move from link-based search results to AI answers that summarize information directly.
As AI answers – responses generated directly by LLMs such as ChatGPT and Google’s AI Overviews – replace links, overall referral traffic declines, but the value shifts to the sources cited within those responses.
The analyst points to multiple studies suggesting Reddit accounts for a disproportionate share of those citations, consistently representing between 20% and 40% of sources referenced by AI-generated answers.
“As AI-Answers replace links, economic benefits shift to the citations that AI-Answers give, and 20%-40% of citations are to Reddit,” Martin said.
This citation dominance is supported by several third-party studies cited in the note. A July 2025 Pew study found a meaningful gap in click behavior between searches with and without AI summaries, reinforcing the idea that reduced clicks increase the importance of citation ownership.
A large-scale Semrush study published in the fourth quarter of 2025 analyzed 230,000 prompts across major AI platforms and found that Reddit appeared in roughly 40% of AI-generated responses.
By comparison, Wikipedia and YouTube trailed with citation rates of 26.3% and 23.5%, respectively.
Ironically, Semrush said that AI models favor Reddit because it offers “real, human responses, from users with experience in related fields.”
Martin also points out similar findings from Axios and Similarweb. Axios data showed Reddit was a top-cited platform across all major language models, while Similarweb observed rising “zero-click” behavior as Google’s AI overviews expanded, alongside heavy citation of Reddit.
From a business perspective, Needham sees two key economic benefits for Reddit from this shift.
The first is data licensing, with the firm estimating more than $120 million per year in license fees from large language model providers, a figure it believes could double once ongoing litigation with other AI firms is resolved.
The second is advertising upside, as increased visibility through AI citations drives impressions and engagement.
