Alex Norström, co-CEO of Spotify, defended the company’s strategy regarding AI-generated music during an interview with the Financial Times on May 26. He stated that compared to the unregulated flood of “AI slop” currently circulating online, Spotify aims to be the “legitimate” and “controlled” player in this space. Just one week prior, on May 21, Spotify announced at its Investor Day that it had reached a licensing agreement with Universal Music Group (UMG), allowing users to generate AI covers and remixes of tracks by participating artists. This tool will be offered as a paid premium add-on for Premium subscribers, with participating artists receiving revenue shares; enrollment is voluntary, and the deal covers both sound recordings and music publishing rights. On the day the news broke, Spotify’s stock price surged 13%.
Norström emphasized that the entire model rests on three core principles: “consent, attribution, and compensation.” This approach stands in contrast to the more aggressive strategies adopted by AI music tools like Suno and Udio during a period when legal frameworks remained unclear — UMG has since settled disputes with Udio. Sir Lucian Grainge, Chairman and CEO of Universal Music Group, described this partnership as a “fan-engagement initiative” that is “artist-centric and rooted in responsible AI usage.” Gustav Söderström, Spotify’s other co-CEO, noted that the company’s competitive edge lies in leveraging proprietary data about users’ musical preferences rather than developing its own large language models. As of Q1 2026, Spotify boasts 761 million monthly active users, including 293 million paying subscribers across 184 markets; the firm projects a double-digit annual revenue growth rate through 2030, with gross margins projected between 35% and 40%. Specific pricing details and launch dates for the new tool remain undisclosed.