Spotify has reportedly reached a new agreement with Universal Music Group, marking a major move to let subscribers generate AI content from their platform. 

The significant move puts Spotify in a hyper competitive landscape with startups such as Udio and Suno that allow AI-powered music creation.

The primary motive behind this collaboration is to enable the audio-streaming giant to produce AI covers and remixes of songs using its platform.

The companies clarified that the new tools are designed to create an additional sort of revenue stream for artists and songwriters. 

It is crucial to note that they already earn on Spotify including through royalties. In this connection, Spotify co-CEO Alex Norstrom said: “What we’re building is grounded in content, credit and compensation for the artists and songwriters that take part.”

Meanwhile, major recording companies are looking for new licensing agreements to protect their vast catalogs as AI-generated music grows in popularity and consumers immensely struggle to distinguish them from human-composed songs.

Spotify has previously launched AI-powered music discovery features to enhance user engagement, voice interaction of its personalized background audio and the option to generate playlists using natural-language prompts.