Spotify and Universal Music reach agreement to allow subscribers to create AI remixes

Spotify and Universal Music Group have agreed to a deal that will allow subscribers to create song covers and remixes using artificial intelligence.

The licensing agreement marks the first time that the Swedish streaming company will allow its listeners to use AI to create content across its platform.

It is expected to be available in the form of a paid add-on on the Spotify app. Premium users can remix songs from participating artists and create AI-driven licensed covers. Spotify said the new tool could create an additional revenue stream for artists and songwriters on top of what they already earn through royalties.

The financial terms of the deal were unclear and the companies did not disclose which artists would participate in the licensing agreement. Universal Music is home to artists like Taylor Swift, Ariana Grande and Billie Eilish.

Shares of Spotify rose 16% on Thursday, with revenue expected to grow at an annual rate in the “mid-teens” and gross profit margin between…