Spotify wants to let fans create AI remixes and covers, but licensing is the hurdle

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Spotify says it wants fans to create AI-powered remixes and covers of their favorite songs directly inside the app, but record label licensing agreements remain the final obstacle. Speaking on the company’s Q4 2025 earnings call on February 10, 2026, Spotify Co-CEO Gustav Söderström laid out a two-part AI strategy: fully original music created with generative tools, and “derivatives” of existing songs, including remixes, reinterpretations, and covers. It’s the second category that appears to excite the company most.

Söderström described “derivatives, new takes on existing music” as an “untapped opportunity for artists to make money off of their existing IP.” In other words, Spotify believes fan creativity, powered by AI, could become a new revenue stream rather than a legal liability. The technology, he suggested, already exists. What’s missing is the rights framework.

A race to monetize AI music

Spotify’s framing places it squarely in the middle of a growing industry push to turn AI from an existential threat into a monetization engine. Söderström compared music IP to film and television catalogs, describing existing content as “incredibly valuable.” The difference, he argued, is that music has lacked the legal and technical infrastructure to safely commercialize AI-driven reinterpretations.

“Everything we see tells us listeners want to interact with their favorite music and many artists want to let them, creating new revenue from their existing catalog,” Söderström said. “We have the technology and capabilities ready to unlock this in a way that is additive for both IP rightsholders and Spotify.” He emphasized that Spotify intends to build these tools “with artists’ support, not around them.”

The idea that fans want to create, not just consume, music is gaining traction across the industry. On Warner Music Group’s recent earnings call, CEO Robert Kyncl said that “superfan tiers of the future will all include AI functionality to create.” He described creation as “the ultimate expression of fandom,” adding that WMG is already discussing AI creation tools with digital streaming platforms as part of higher-priced subscription tiers. If those discussions materialize, AI remix tools could become a premium feature instead of a free experiment.

The walled garden debate

Spotify’s ambitions arrive amid a broader industry debate over so-called “walled gardens” in AI music.

Last year, Universal Music Group signed a settlement agreement with AI startup Udio that outlined a tightly controlled model for creating licensed AI music. Under that framework, AI-generated tracks cannot be freely downloaded or distributed outside the platform. Warner Music Group later signed its own agreement with Udio under similar restrictions. Warner’s deal with Suno, however, appears more flexible. Suno has retained the ability for users to generate and download songs. This represents a notable difference in how rights holders approach control versus openness.

UMG executive vice president and chief digital officer Michael Nash recently warned that without guardrails, AI derivatives could allow users to “effectively use artists’ content and their brand to create derivatives where you’re going to compete with the artist on other platforms.” Suno, meanwhile, has argued for what its Chief Music Officer Paul Sinclair calls “open studios, not walled gardens.”

Spotify seems to be positioning itself somewhere between those poles. Rather than enabling open distribution of AI derivatives across the internet, Söderström framed Spotify as an all-in-one ecosystem: a place where fans create, artists monetize, and royalties flow through a controlled system. “If you’re an artist looking to unlock this potential upside, you’d want to do it on the world’s leading music platform,” he said. “Your fans and the largest royalty pool are already there.” The implication is clear: if AI remixing is going to happen, Spotify believes it should happen inside Spotify.

Could AI platforms compete with DSPs?

The question shadowing the industry is whether AI-native platforms will evolve into complete streaming competitors.

During the earnings call, Spotify Co-CEO Alex Norström was asked whether companies like Suno, Udio, or Stability AI could become digital streaming platforms (DSPs) themselves and take share from Spotify. His answer was direct: “No rightsholder is against our vision. We pretty much have the whole industry behind us.” That confidence suggests Spotify sees itself not as threatened by AI platforms, but as the logical home for licensed AI creation, provided labels sign off.

The murky waters of creativity and disclosure

The creative implications are less clear. When asked what percentage of music currently on Spotify is AI-generated, Söderström declined to provide a figure. Instead, he argued that Spotify should not act as the arbiter of which tools artists are allowed to use. “Are you allowed to use an electric guitar, a synthesizer, or a digital audio workstation, or AI?” he asked. “Or a more complicated question, a bit of AI, like 1%, 15%, 20%, 100%? We don’t think it’s our decision to make.”

Still, Spotify does believe listeners deserve transparency. Söderström pointed to ongoing work with labels and creators on metadata standards that disclose how music was made. The company also recently launched its ‘About The Song’ feature, which surfaces contextual information about tracks from across the web. Transparency may become increasingly important as AI-generated music scales.

Addressing concerns about so-called ‘AI slop,’ Söderström acknowledged that generative tools can “accelerate the amount of spammy tracks” uploaded to platforms. But he framed it as an existing moderation challenge, not a new one. “Because it’s been a problem for a long time, we’ve been investing more than anyone else in the industry to curb this problem,” he said. “For us, spammy AI music is not a new problem. It’s just more scale on an existing problem.”

Last September, Spotify revealed it had deleted more than 75 million “spammy tracks” over the previous 12 months. Meanwhile, Deezer reported that it is now receiving over 60,000 fully AI-generated tracks per day — roughly 39% of all daily uploads. The scale is already significant. If AI remix tools become embedded directly inside major streaming platforms, that number could grow rapidly.

What this means for listeners

For listeners, the promise is creative empowerment: the ability to remix a favorite track, reinterpret a chorus, or generate a stylistic variation inside the same app used to stream the original. For artists and labels, the pitch is monetization. AI derivatives would not compete in an open market; they would generate revenue within a licensed ecosystem.

For Spotify, the strategy is defensive and expansive at the same time. By embedding AI creation tools inside its platform, it could prevent fan creativity from migrating to standalone AI apps while opening the door to higher-priced superfan tiers. The only question left is whether labels agree on the rules. If they do, Spotify may not just be a streaming service in the AI era — it could become a studio too.