Bond.az -- Spotify stock surged 10.9% in morning trading to reach $480.50 after the music streaming giant reached an agreement with Universal Music Group to allow subscribers to create AI-generated covers and remixes of songs.
This marks the first time the audio-streaming company will permit users to produce AI content using its platform.
The companies announced the deal on Thursday but did not disclose the financial terms or which artists will participate in the new feature. Universal Music represents artists including Taylor Swift, Ariana Grande, Drake and Billie Eilish.
The move positions Spotify in more direct competition with startups such as Udio and Suno that offer AI-powered music creation.
The new tool will create an additional source of income for artists and songwriters, on top of what they already earn on Spotify including through royalties, according to the companies.
The company also projected mid-teen revenue CAGR through 2030, paired with a detailed AI monetization strategy that addressed one of the market's most pressing concerns about the platform's competitive positioning.
