Spotify has outlined a major long-term strategy built around artificial intelligence, creator monetisation and premium subscriber experiences, while also announcing a new partnership with Universal Music Group that will introduce AI-generated song covers and remixes on the platform.
The streaming company said the new tools and features are intended to deepen user engagement, create additional revenue opportunities for creators and strengthen Spotify’s position amid growing competition from AI music platforms and rival entertainment services. Following the announcement, Spotify shares rose 13%.
As part of its agreement with Universal Music Group, select Spotify subscribers will gain access to tools that allow them to create AI-generated covers and remixes using music from participating artists signed to the label. Financial terms of the partnership were not disclosed, and neither company confirmed which artists would be included in the initial rollout.
Universal Music Group’s roster includes artists such as Taylor Swift, Ariana Grande, Drake and Billie Eilish.
Spotify co-CEO Alex Norstrom told Reuters that the feature has been developed with “consent, credit and compensation” in mind for artists and songwriters. The company said subscribers will initially receive limited access to the AI remixing tools, with additional usage available through paid upgrades.
The move marks Spotify’s first direct step into AI-powered music creation within its own ecosystem, as labels continue pursuing licensing frameworks and commercial agreements around the use of copyrighted music in AI-generated content.
The announcement comes amid broader industry discussions around copyright and AI training data. Last year, AI music startups Udio and Suno entered agreements with major labels following copyright disputes, though both companies continue to face legal action from independent artists over alleged copyright infringement.
Alongside the Universal Music partnership, Spotify introduced a range of new AI-driven features and products.
One of the new launches, “Personal Podcasts”, allows users to generate customised podcast episodes based on prompts. Spotify also revealed “Studio by Spotify Labs”, a desktop application powered by AI that can create and personalise content for users. The preview version of the app will initially launch for Premium subscribers in more than 20 markets.
The company is also expanding existing AI-powered discovery tools including AI DJ and natural-language playlist generation.
Spotify additionally unveiled “Reserved”, a feature that will allow eligible Premium users to access up to two concert tickets for select artists before tickets become available to the wider public.
On the business side, Spotify said it is targeting mid-teens compounded annual revenue growth through 2030 and expects gross margins to increase to between 35% and 40%, compared to roughly 32% last year. The company also projects operating margins to rise above 20%, up from 12.8% in 2025.
The platform is also introducing “Memberships”, a feature designed to help podcasters build recurring revenue directly from listeners. Spotify added that its Audiobooks+ business is on track to generate $100 million in annualised recurring revenue as the company expands subscription offerings in the category.
The announcements offer a clearer indication of how Spotify’s leadership, under co-CEOs Alex Norstrom and Gustav Soderstrom, is positioning the platform around AI tools, premium experiences and creator-focused monetisation.
