Spotify and Universal Music Group have announced a new licensing agreement that will allow Spotify subscribers create AI-generated covers, remixes, and alternate versions of songs from participating artists.
The deal, unveiled during Spotify’s 2026 Investor Day presentation, will launch as a paid add-on for Premium subscribers, although all users will still be able to stream the finished tracks. Pricing and an official launch date have not yet been confirmed.
The agreement places Spotify more directly in competition with AI music platforms like Suno and Udio. Unlike those platforms, however, Spotify says the feature will operate on a fully licensed basis, with participating artists and songwriters receiving compensation tied to usage.
Spotify co-CEO Alex Norström said the company’s AI strategy is built around “consent, credit, and compensation,” while UMG Chairman Lucian Grainge described the partnership as a new way for artists to deepen fan engagement and generate additional revenue.
The announcement highlights how central AI has become to Spotify’s long-term plans, with the company positioning generative AI and personalised listening experiences as major future growth areas.
Spotify ended the first quarter of 2026 with 761 million monthly active users and 293 million paying subscribers across 184 markets.