Link exchange
A link exchange is when two websites agree to swap links. Done at scale to boost rankings, Google treats it as link spam.
A link exchange is a deal where two websites each add a link to the other: you link to me, I link to you. It's also called reciprocal linking. In the early days of SEO, sites swapped links by the hundred, with whole "partners" pages full of links to sites that had nothing to do with them.
For a marketer, the question is when a swap is a normal part of working with someone, and when it's a scheme.
What Google says
Google's spam policies list "excessive link exchanges," and partner pages made only for cross-linking, as link spam. The key word is excessive. Two businesses that genuinely work together linking to each other is normal. A deal made only to pass ranking value, especially at scale or with sites in unrelated fields, isn't.
For example, a coffee roaster and the café that serves its beans linking to each other is natural, and it helps their customers. A roaster that has swapped links with 80 sites selling everything from car insurance to garden sheds is running a scheme.
Link swaps and AI answers
Swaps between related businesses can still be useful, for a different reason. When the café's site says "we serve Kestrel Roasters' house blend," that's a real description of Kestrel on a page about coffee in that town. An AI platform answering "where can I drink Kestrel coffee in Leeds?" can read and use it.
A link on a page of 80 unrelated swaps gives an AI answer nothing to repeat. There's no description, no reason to recommend you, and no reason for the page to be read at all.
In AnswerOrbit
We never recommend links you pay or trade for. Recommendations sticks to getting you described on the pages the AI answers already read, such as lists that name your competitors, directories and review sites. See Recommendations.