Strong ad sales have propelled Steve Huffman into the billionaire ranks. Now he’s charting a new course, aiming to become invaluable to AI companies.
Reddit has hit its stir After trudging through nearly two decades losing money, the platform recorded its first quarterly profit one year ago—and just posted its most lucrative financials yet. The company announced a net income of $163 million on Thursday, marking five consecutive quarters of profitability, about a year and a half after going public.
The market rewarded the company. Reddit’s stock closed at $208.95 on Friday, up 7.5% from the previous day and up 75% year over year. It was enough to bump the fortune of cofounder and CEO Steve Huffman up to $1.2 billion.
“Q3 was a strong quarter,” Huffman said on Thursday’s earnings call, in which he lauded Reddit as being “for humans by humans” and seemed to take a subtle dig at AI slop (the low-quality AI content clogging corners of the internet): “Reddit is in a unique position; we’re not trying to be the next anything. We’re focused on being the best version of ourselves and what the internet needs most: a place where people can connect on almost any topic and find genuinely useful information.”
Authentic human recommendations are a hot commodity these days. As bots and sponsored content crowd the internet, Reddit is often seen as a more reliable source of information, and its popularity has exploded in the past couple of years. Daily active users have approximately doubled since the summer of 2023. Google searches increasingly surface links to Reddit: Organic search to the platform is up over 560% from two years ago, per data from digital marketing firm Semrush.
Given that Facebook, Twitter (now X) and LinkedIn long ago minted a class of early-2000s social media billionaires, it may seem surprising that Huffman is so late to join that club. After all, Reddit was the world’s seventh-most visited website in September, according to Similarweb, ahead of LinkedIn, TikTok and Netflix. But that’s because Huffman, now 41, unloaded his founder’s stake in the then startup in 2006.
About a year after launching the company in June 2005, he and his partner Alexis Ohanian—now a venture capitalist married to tennis icon Serena Williams—sold out to Condé Nast for just $10 million. It seemed an enormous sum for them at the time, the pair has said. Without any plans for monetization, and overwhelmed with running the exploding platform with just a few employees, they viewed the acquisition as a rescue. Perhaps in the short term, but long term, they left massive sums on the table. By 2014, the company was valued at $500 million.
Ohanian, who joined Reddit’s board in 2014 but left in 2020, has said he did reacquire some shares while on the board, but likely gets most of his fortune from his many startup investments. Huffman, on the other hand, appears to be Reddit’s biggest individual shareholder these days. That’s because Reddit poached him back in 2015 to help navigate a streak of operational crises. His CEO compensation package has since allowed him to amass 3.1 million shares, or a 2.3% stake in the company. The rest of his fortune lies in Reddit stock options and $190 million in cash and other investments, Forbes estimates. Huffman declined to comment for this story.
While generous stock awards are common among the billionaire CEO set—Tesla investors are even weighing whether to approve a $1 trillion compensation package for Elon Musk this week—it’s rare for an executive to build up such a significant stake essentially from scratch.
In its 2024 IPO document, the company explained that it had massively increased the compensation of Huffman and COO Jen Wong the previous year because their packages had not been “providing the incentive initially intended”; Huffman’s ballooned to $193.2 million in 2023.
It’s easy to argue that he’s earned his payday. When he became CEO in 2015, Reddit was in a state of emergency. The company was moderating content with an ultra-light touch, but it was becoming clear that some “subreddit” communities were overwhelmed with toxicity and harassment. When Reddit fired a popular employee who had been the company’s main contact with its volunteer moderators, moderators protested by shutting down their subreddits in what became known as the “Great Reddit Blackout.” A week later, Huffman took over.
“It was 10 years into Reddit of ‘we don’t ban things,’” he recently told “The Best One Yet” podcast. “I think that was one of the things that only a founder can do, because the existing team at Reddit was so scared. This is what they told me: They were scared of changing anything, because they thought they’d ruin Reddit.”
Huffman began by implementing the platform’s first content policy, which included prohibitions on spam, bullying, inciting violence and illegal activity. His team quickly banned a collection of subreddits, including some devoted to animated child pornography and a network of racist subs promoting “a proper society that lacks the negro plague.” Reddit began “quarantining” subs it deemed licit but especially offensive, requiring users to opt in before viewing their content. One example: r/PicsOfDeadKids, which was fully banned a few years later, as sometimes happens to quarantined subs. The goal was to make the space not only more pleasant for users, but also more attractive for advertisers. (Reddit does not run promotions on quarantined content.)
Huffman and his team fixated early on advertising as the best initial monetization strategy for Reddit, in part because it could help them keep the platform free. “He built the company’s advertising business from the ground up,” says Morningstar analyst Malik Ahmed Khan.
One of the challenges has been helping brands target their ads without compromising Reddit’s pivotal user anonymity. Unlike platforms like Meta and Google—which allow promoters to personalize ads based on demographic data and broader tracking across the internet—Reddit requires brands to use context clues. If a user joins a parenting subreddit or upvotes posts about pregnancy, for example, they may be more likely to see promotions for baby products.
So far, it’s working. Advertising brought in $549 million last quarter, 94% of Reddit’s revenue. The company was generating only around $12 to $15 million in total sales when Huffman joined.
New challenges lie ahead. Reddit is at the nexus of many of today’s hot-button debates, from the ethics around training AI models on user data to compromises between free speech and content moderation to the viability of text-based content in an online culture that’s increasingly focused on video.
Huffman appears unfazed: “No matter what you’re going through, someone on Reddit has already been there, done that, and shared the story,” he said Thursday. “The best pitch for Reddit is Reddit’s content.”
The son of divorced parents, Huffman grew up in a small town in Virginia near Washington, D.C. Starting and running his own business “always seemed like a possibility,” he once said, thanks in part to his father’s wild imagination for ventures (he was an engineer at GM) and his stepdad’s financial savviness (he was chief marketing officer at Unisys). He learned how to program computers when he was young and leveraged the hobby into a computer science degree at the University of Virginia, where he met Ohanian. By the end of their senior year, the pair knew they wanted to start some sort of company together. It was just the concept that needed tweaking.
Huffman’s first idea was software for ordering food on a phone. The task sounds quaint and obvious now, but this was before the app era—and the newly formed startup accelerator Y Combinator rejected their pitch, termed “My Mobile Menu.” Y Combinator cofounder Paul Graham was nevertheless impressed enough with the duo that he asked them to submit another idea. Their second pitch was accepted. With a $12,000 grant in hand, they spent a few weeks designing Reddit before launching it shortly after their graduation, when Huffman was 21.
Then came snowballing user growth, 16-hour workdays and the eventual sale to Condé Nast. Huffman stayed on as acting CEO until 2009, when he left to cofound another company: the travel search engine Hipmunk. Concur acquired Hipmunk in 2016 for an undisclosed sum and shut it down in 2020. Meanwhile, Condé Nast had spun out Reddit again and raised funds from outside investors like future OpenAI cofounder Sam Altman, but was having trouble monetizing the business. That’s when Huffman stepped back in.
In addition to building ad revenue, Huffman’s early projects included a site redesign and the creation of a mobile app. The platform, which had 12 million daily users when he rejoined, now has 116 million. Reddit has historically been a U.S.-centric site, but it recently implemented translation capabilities for 30 languages so that users can easily read and contribute in their non-native tongues. That’s led to a 31% bump in international daily users over the past year.
These days, Reddit’s second major source of revenue is licensing its content to train AI models. The platform used to allow free and open access to its application programming interface (API), where developers interact with all of the site’s data. But Reddit started charging for its API in 2023. It now works to block unknown bots from crawling the site, and is suing a handful of AI companies—including the search engine Perplexity—for allegedly scraping its data without permission.
A select few have paid for permission. Huffman signed licensing deals with Google and OpenAI last year for a reported $60 million and $70 million, respectively. The site’s enormous collection of real-time, human-generated content has proven to be extremely valuable: Reddit was the most-cited source for Google’s AI Overview citations, and the second-most for ChatGPT’s, between August 2024 and June 2025, per the AI analytics platform Profound.
Given Reddit’s centrality to their models, those fees could be seen as quite low. The $60 million Google reportedly paid is just 0.07% of the more than $90 billion that its parent company Alphabet (market cap: $3.4 trillion) expects to spend on AI infrastructure this year.
“Those price tags set a low watermark,” says Colin Sebastian, senior research analyst at Baird. “As Reddit has more negotiating leverage, as the power of their content becomes more clear to the models, then I think the next deals should likely be priced higher than that.”
And there’s always the risk that Reddit, in propping up AI chatbots, could diminish its own relevance. As something of a hedge, Huffman launched “Reddit Answers” in December, later telling investors that he wants the platform to become a “go-to search engine.” A search query into “Reddit Answers” returns a list of quoted recommendations from real users (with links to the original comments), collated by AI.
Huffman has acknowledged that Google search traffic to Reddit has at times been challenged by the rise of AI but again is confident in its future. “Part of what helps them balance on the tightrope is that I think the language models want Reddit to survive,” says Sebastian. “Realistically, these models need a constant flow of authentic, human-generated content, and that’s hard to find. It can’t just be synthetic data. So there’s almost a perverse incentive for Google and Open AI to keep Reddit as a robust app for users.”
To personally test that Reddit user experience, Huffman spends a fair amount of time on the platform himself. He’s published over 1,000 posts and comments; he hosts AMAs (“Ask Me Anything” sessions). Prior to the earnings announcement, his last activity was an Oct. 3 comment in response to a user celebrating that the 117 Reddit shares they’d bought at the IPO had since gone up more than 500% in value. Huffman replied with a smiley face.