Spotify and Universal Music Group have reached a landmark licensing agreement that will enable subscribers to generate song covers and remixes using artificial intelligence. This is the first time the Swedish streaming giant has allowed listeners to use AI to create content through its platform.
The new feature is expected to be offered as a paid add-on within Spotify's app. Premium users will be able to remix tracks from participating artists and create AI-driven licensed covers. Spotify stated that this tool could provide an additional revenue stream for artists and songwriters, supplementing their existing royalty earnings.
Financial details of the deal remain undisclosed, and the companies have not revealed which artists will participate. Universal Music represents major stars such as Taylor Swift, Ariana Grande, and Billie Eilish.
Spotify's shares rose 16% on Thursday following the announcement. According to the Financial Times, the company expects revenue to grow at a mid-teens annual rate and gross profit margins to reach between 35% and 40% by 2030.
Spotify co-chief executive Alex Norström commented: "Solving hard problems for music is what Spotify does, and fan-made covers and remixes are next. What we're building is grounded in consent, credit, and compensation for the artists and songwriters that take part."
Universal Music's chief executive Lucian Grainge said the deal aims to "support human artistry" and "create additional revenue opportunities for artists and songwriters." He added: "Building on our long track record of leading the industry through technology changes, and collaborating with Alex, Gustav, Daniel and the team at Spotify, this initiative is firmly artist-centric, rooted in responsible AI, and will drive growth for the entire ecosystem."
Spotify is actively seeking new ways to expand beyond traditional music subscriptions and integrate AI into its ecosystem. Earlier in May, the company announced a beta feature allowing AI agents to create and play "personal podcasts"—daily briefings private to the user.
Artificial intelligence remains a pressing concern for the music industry, with artists and songwriters worried about copyright issues and the role of AI-generated music. At the end of April, Spotify introduced a verification system to help users distinguish human artists from AI-generated content. The "Verified by Spotify" badge, marked by a green checkmark, will appear on artist profiles and in search results in the coming weeks, indicating that a profile has been reviewed and meets authenticity standards. "In the AI era, it's more important than ever to be able to trust the authenticity of the music you listen to," the company stated.
