Spotify and Universal Music Group have reached a new agreement that will enable subscribers to generate AI-powered song covers and remixes.
The licensing deal marks the first time Spotify will allow users to create content using artificial intelligence directly on its platform.
The feature is expected to launch as a paid add-on within the app, allowing Premium subscribers to remix tracks from participating artists and produce AI-generated, licensed cover versions.
Spotify said the tool could provide artists and songwriters with an additional revenue stream on top of existing royalty earnings.
The financial terms of the agreement were not disclosed, and neither company specified which artists will take part in the licensing arrangement.
Universal Music Group is home to major artists including Taylor Swift, Ariana Grande and Billie Eilish.
Spotify shares rose 16 per cent on Thursday, as investors reacted positively to the development.
The company expects revenue to grow at a “mid-teens” annual rate, with gross profit margins projected to remain between 35 per cent and 40 per cent through 2030, according to Financial Times.
“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,” said Spotify co-chief executive Alex Norström.
Universal Music Group chief executive Lucian Grainge said the agreement is designed to “support human artistry” while also creating “additional revenue opportunities for artists and songwriters.”
“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,” he said.
Spotify is increasingly exploring new growth avenues beyond traditional music subscriptions, with a stronger focus on integrating artificial intelligence into its ecosystem.
In early May, the company introduced a beta feature that allows AI agents to create and play “personal podcasts,” offering users a private, daily audio briefing tailored to their preferences.
Artificial intelligence remains a major concern across the music industry, with artists and songwriters raising questions about copyright protection and the broader implications of AI-generated music within the creative ecosystem.
