Spotify and Universal Music Group have signed a licensing deal allowing Premium subscribers to generate AI covers and remixes of songs by participating UMG artists. This marks the first time Spotify has formally licensed generative AI on its catalogue. The product will launch as a paid add-on with no public release date, built around artist consent, credit, and compensation. Financial terms and participating artists were not disclosed. Spotify shares rose 14-16% on the news. The deal attempts to resolve the legal grey zone AI music tools have operated in, creating a structure where labels, artists, songwriters, and the platform all share revenue from AI-generated content. Key questions remain about whether songwriters — historically underpaid in streaming — will receive fair compensation under the new model.
