lawsuits. But eventually it hopes bot-weary users will return to one of the internet’s last refuges of human-generated content. Reddit’s business model lies somewhere between Instagram (which profits off user-generated content) and Wikipedia (which relies on an army of volunteer moderators). That balance has sometimes been tricky to manage. In 2023 the volunteers who moderate its “subreddits” went on a multi-day strike after the company said it would charge for access to its application programming interface, on which independent developers who build Reddit- based apps rely. The platform, which stuck with the policy, may have had larger clients in mind. Soon afterwards it struck deals with Google and OpenAI, maker of ChatGPT, which reportedly agreed to pay $60m and $70m a year, respectively, to train their models on Reddit’s data. They may have got themselves a bargain. Reddit has become the most-cited source by many of the leading American chatbots, according to an analysis the company commissioned from Profound, a research firm. One particularly valuable use of its data is for generating product recommendations. About 40% of conversations on the site relate to commercial activity including shopping, says Jen Wong, Reddit’s operations chief. On subreddits such as r/BuyItForLife, users debate the quality of products—and try to weed out sponsored or bot-generated content—making the results a rare source of high-quality reviews. AI models rely heavily on such content to generate their own recommendations, which chatbot-makers hope to turn into a source of ad revenue. Google’s relationship with Reddit in particular has become less of a two- way exchange. For years Google’s ranked search results have been an important source of traffic for the chat site. But as the tech giant shifts users’ focus to its AI overviews, referrals have dropped precipitously. Reddit’s stock took its largest-ever single-day plunge last month after it said that “choppy” search referrals had hurt engagement. Last quarter the amount of time users spent on Reddit’s app each day was down by 8% from a year earlier, compared with gains of 6% and 4% for Instagram and TikTok, respectively, according to Sensor Tower, a data provider. One option for Reddit is to bargain for a better deal with AI providers. It has been negotiating new agreements with Google and others. If that does not
work, lawsuits may. Reddit has already sued Anthropic, another model- maker, and Perplexity, an AI search engine. Both suits allege that the companies scraped Reddit’s data illegally. (Anthropic and Perplexity have said they did not break the law.) Victory in court—or lucrative settlements— would give the chat site greater leverage in negotiations over licensing its data. Ultimately, though, Reddit hopes to lessen its reliance on other tech firms. Traffic from search is “not where our business lives”, said Steve Huffman, its boss, in last month’s earnings call. Instead the company hopes to encourage more users to visit its site directly, and spend more time browsing once there. That would further boost its ad revenue, which grew by 64% in the second quarter, year on year. Ms Wong is optimistic that the (mostly) human content on Reddit will appeal to users as they grow tired of interacting with chatbots. Aspiring film-makers need not fear being starved of material just yet. ■ This article was downloaded by zlibrary from https://www.economist.com/business/2026/08/20/can-reddit-survive-in-the-ai-era
Canada’s oil industry is booming. Can it last? Looser regulations will help with pipelines—but may not boost production Aug 20th 2026 “Please God, give me one more oil boom—and I promise not to piss it all away next time” reads a popular bumper sticker in Canada’s oil patch. Recent results from the country’s oil producers show that plea has been answered. Oil prices have jumped as the passage of tankers through the Strait of Hormuz has been choked off. Last month Cenovus Energy reported that operating profits in its most recent quarter had nearly tripled compared with a year before. Canadian Natural Resources posted its best-ever quarterly adjusted operating profit. Moreover, the easing of political headwinds in Canada may improve the chances of the boom lasting. Canada has the world’s fourth-largest proven reserves, with 97% found in the oil sands in a remote corner of the land-locked province of Alberta. Here
the bitumen, mixed with sand and clay, is almost solid, and is mined rather than tapped from the ground. It is costly and dirty to extract and process. Despite the drawbacks, high prices combined with a weakening of the Canadian dollar mean that “it hasn’t been this good to be an oil-sands producer in a very long time,” says Andrew Leach of the University of Alberta. Getting more oil to market is also set to become easier. Justin Trudeau, Canada’s former prime minister, was tepid in his support for new pipelines, fearing the consequences for the climate. In 2018 regional political opposition led Kinder Morgan, an American firm, to suspend work on a conduit from Alberta to the west coast in British Columbia. That forced the national government to step in and complete it. Oil eventually started flowing in 2024. Lately the political mood has shifted. A trade war with America, the destination for 90% of Canadian oil, has shifted the federal government’s focus to reducing dependence on its southern neighbour. That includes support for building new infrastructure to transport oil (and gas) to ports on Canada’s west coast, from where it can be shipped to Asia. Mark Carney, Canada’s current prime minister, is intent on slashing the red tape that holds up projects, including streamlining environmental permitting and consultations with indigenous communities. The speedier process will apply to a new pipeline under development to British Columbia, announced last month. Lisa Baiton of the Canadian Association of Petroleum Producers, an industry group, has spoken of a “generational opportunity” to rally political and public support behind new oil projects. The promise of a federal government more friendly to pipes may not be enough, however. Enbridge, an energy-infrastructure firm, has paused construction of a pipeline to the east, citing a lack of commitments by producers to provide enough oil to make it worthwhile. The unique challenges of the oil sands provide an explanation. Investment in new sites has been virtually non-existent since the oil price crashed in 2014 as demand weakened while America’s shale oil gushed and opec opened the taps. “It cannot be overstated how much that changed the industry,” says Kent Fellows of the University of Calgary. Moreover, projects in the oil
sands take far longer to develop than conventional wells. They require enormous amounts of capital that could be tied up for five to ten years before profits flow. Uncertainty over the future price of oil—and the danger that a change of government might lead to the reinstatement of tighter regulations—make for risky bets. Nevertheless, at the Calgary Stampede, an annual rodeo festival held in July that serves as the industry’s unofficial barometer, parties hosted by oil companies were back to their riotous best after quietening down in recent years. Their sponsorship of rowdy chuckwagon races broke records. That is as good a sign as any that another boom is in full swing. ■ This article was downloaded by zlibrary from https://www.economist.com/business/2026/08/20/canadas-oil-industry-is-booming-can- it-last
The war on data centres is a bit fake Developers are exaggerating their plans, just as politicians are overstating their opposition Aug 20th 2026 In February, shortly after making his feature-film debut as a pen magnate in “Marty Supreme”, Kevin O’Leary announced that he would build one of the world’s biggest data-centre projects in Utah. The market shrugged. What did Mr O’Leary, who is best known for presenting “Shark Tank”, know about data centres? How would it be paid for? Or powered? One analyst dismissed the project as an example of “vapourware gigawatts”. But a joke in the marketplace became dynamite in the town square. In June J. Stuart Adams, president of the Utah Senate, who had initially supported Mr O’Leary’s venture, demanded that its size be reduced by three-quarters. Mr O’Leary accused his critics of working for China (he later withdrew
that), but eventually agreed to scale back his dreams. Even then Mr Adams, a long-serving Republican lawmaker, along with a pair of county commissioners, lost primary elections because of the scandal. Data centres are a nightmare of political economy. Voters see them as ugly, dirty, noisy and power-hungry bastions of arrogant Silicon Valley companies. And—thanks to ChatGPT—it has never been easier to pen a letter to the planning department saying so. Yet the public has an awful lot riding on these windowless sheds, for the stock market is a one-way bet on them being built. Data centres are particularly disorientating for Democrats, since unions tend to support the projects. If artificial intelligence is a class war, it pits a coalition of billionaires and electricians against the office droids both despise. Wildcatters like Mr O’Leary are a soft target for politicians who want to be seen as tough on data centres but still want them to be built. On August 18th Josh Shapiro, the governor of Pennsylvania, derided the developers “scaring our communities” and signed an executive order he said would squash “speculative proposals” that had little chance of being built in the first place. Of the more than 100 projects announced in the state, less than a fifth had applied for the permits needed to develop them, he said. Imaginary scalps are easy to claim. Silicon Valley giants are the biggest backers of data centres. But beside them is a long line of property developers, private-capital firms, “neo-cloud” operators and crypto-miners, followed by international chancers, national rogues and local spivs. Most of their plans were destined to remain press releases. Analysts at Bernstein, a broker, attempted to quantify the credibility of each watt of announced capacity. Plans by Google and Amazon are taken at their word. Those by CoreWeave and Nebius, two large neo-clouds, are discounted by around half. Mr O’Leary is ignored. According to their model, another fantasist is Vermaland, a land bank that announced a gargantuan 3GW facility in Arizona last year. In May the project was reportedly cut by four-fifths after facing local opposition—a shadow-boxing knockout. Little information is available about a 1GW project in south Florida that was supposedly shelved in February, except that the land had been bought for $15m in 2024 by an obscure investment firm.