BuzzFeed just closed a $120 million lifeline deal that hands control to media mogul Byron Allen and pushes founder Jonah Peretti into a new role as president of BuzzFeed AI. The transaction comes after the once-$1.6 billion digital media darling disclosed it was at risk of running out of cash last quarter. Allen's taking over as CEO while Peretti bets the company's future on AI-powered content and apps - a dramatic pivot from the viral social media empire that defined millennial internet culture but couldn't survive the platform economics that eventually crushed it.
The sale closes the book on one of digital media's most spectacular rises and falls. Just days before speaking to The Verge's Decoder podcast, Peretti agreed to sell majority control of BuzzFeed to Byron Allen, who owns The Weather Channel, broadcast stations, and Local Now. Allen's paying $20 million upfront with another $100 million due in five years.
For Peretti, it's a humbling moment. The company he built into a social media juggernaut - the one that made rubber bands around watermelons compulsory viewing for 90 million people - had issued a going concern statement just last quarter. Translation: BuzzFeed didn't have enough cash to cover expenses for the year.
"We had a lot of inbound interest," Peretti told the podcast, describing the frustrating period when the company couldn't discuss potential deals publicly. "This deal with Byron is one of those. It's really exciting to be able to move forward with more swagger."
The swagger comes with some hard truths. Peretti's giving up his super-voting shares and converting them to common stock. No existing investors or employees are getting paid out - this is pure capital injection into a struggling business. The company's issuing 40 million new shares to Allen, diluting everyone else while handing him 52% ownership and control.
Peretti's remarkably candid about why Allen won. "He's a better media executive than I am," he said. In 2026, that means something different than it did during BuzzFeed's peak. "We're in an era right now where deals really matter a lot. Deal-focused executives are having a lot more success than trying to just build organically."
It's a stark contrast to 2013-2014, when understanding technology and social platforms was everything. Back then, BuzzFeed pioneered viral content on Facebook and mastered the art of social distribution. The bet was simple but ultimately wrong: if you could consistently go viral, platforms would pay you the way cable operators pay ESPN.
"We did get paid millions of dollars by Mark Zuckerberg," Peretti insisted, pushing back on the narrative. "The prediction that they would pay for content was accurate, but it was just short-lived." Facebook paid for longer-form video content with mid-roll ads. YouTube sent revenue share checks. The news tab generated millions.
But then the platforms realized something: teenagers would work for free. An explosion of creators made professional content expensive by comparison. "It was a mistake for Facebook and Mark Zuckerberg to not continue with the news tab," Peretti argued. "These platforms have tons of resources and could have spent a couple of billion dollars a year on that, sustained a vibrant media ecosystem."
The platforms won anyway. They're now gatekeepers to all media, whether they pay for it or not. That reality is driving BuzzFeed's next act.
Allen made a bold claim in the deal announcement: "As of this moment, with the power of AI, BuzzFeed is officially chasing YouTube to become another premier free video streaming service."
When pressed on how that would work, Peretti stayed vague. "What would YouTube be if it started today?" he mused. "What would YouTube be if it were something that was created in the world of GenAI? I think it would be pretty different."
He's launching apps through Branch Office, a skunkworks inspired by Nintendo. There's BF Island, an AI-powered meme generator and social network - "kind of like an inside joke engine" where friends create and share AI content privately. There's Conjure, a daily photo challenge app that uses AI to find hidden mysteries. Writers are "vibe coding" hundreds of games without traditional programming skills.
The AI strategy cuts both ways. Peretti insists HuffPost won't publish AI-generated journalism. "The reason people come to HuffPost is that they can get trusted content that they can't get on the platforms that are full of AI slop." But AI will handle research, data gathering, and creating new interactive formats.
Monetization remains the puzzle. BuzzFeed has "tens of millions" of direct visitors monthly, pivoting away from platform dependence. There's commerce through BuzzFeed Shopping generating "hundreds of millions of dollars" in transactions. HuffPost's membership program is growing. The new apps will use freemium models.
Peretti's betting that AI costs will drop fast enough to make the economics work - Moore's Law for language models. "Anytime we use a new model, six months later, the cost of it is like a 10th of what it was. So a breakeven subscriber six months later is a very profitable subscriber."
Looking back, Peretti has regrets. Disney offered $650 million in 2013. "From a financial standpoint, it's hard to say that wouldn't have been a good deal to take." But he wanted to build something independent, and for a few years, BuzzFeed did hack culture in a massive way.
The 2021 SPAC was another missed opportunity. "The biggest issue was that we missed the window." The deal got delayed by the Complex acquisition - bought with debt that became a burden as the market crashed. "We didn't need Complex," Peretti admitted. Going public faster with just BuzzFeed and more cash would have given the company room to reinvent itself.
Now that reinvention is happening under new leadership. Allen brings deal-making muscle, advertiser relationships, and distribution through Local Now. Peretti gets to focus on technology. The company's planning another restructuring to reach profitability, though Peretti claims the "cash burn has been pretty insignificant."
What remains unclear is whether AI can deliver the same magic that social platforms once did. Back then, BuzzFeed had "totemic power" in media. Young journalists wrote letters saying not working there "kills me every day." That cultural relevance came from understanding a new medium before anyone else.
Peretti thinks AI is that new medium. "A lot of what we do does not read or appear as AI," he said. "People love playing Word Chain, and I don't think they mind that AI coding tools were used in creating it." The apps are the thing, not the technology behind them.
It's a more modest vision than conquering social media. Peretti acknowledges BuzzFeed might only reach "10 percent" of YouTube's scale. But for a company that was nearly out of cash, a path forward - any path forward - counts as a win.
The deal should close by end of May 2026. Then the real test begins: whether Byron Allen's deal-making and Jonah Peretti's AI experiments can rebuild what the platform era destroyed.
BuzzFeed's sale marks the end of digital media's most turbulent era and the beginning of an uncertain AI-driven experiment. Peretti's stepping away from day-to-day leadership of a company he built from viral content king to cautionary tale about platform dependence. Whether AI can rescue BuzzFeed where social media economics failed remains the biggest unanswered question. Allen's bringing capital and connections, but the fundamental challenge hasn't changed: building a sustainable media business when the biggest platforms own distribution. The next chapter starts now, and the stakes couldn't be higher - BuzzFeed either finds its next act or becomes a case study in what happens when you bet everything on platforms that don't need you.
