Spotify confirmed on its second-quarter earnings call Tuesday that it has signed Merlin, a licensing partner for independent labels and distributors, to its upcoming AI-powered remix and covers product. The deal adds more than 30,000 labels from Merlin’s network to the project, which is designed to let fans create legal remixes and covers of songs from artists who explicitly consent to participate.
The announcement marks the second major partnership for the feature, following an earlier agreement with Universal Music Group. Spotify has not yet announced a launch date, but said a research preview will be made available to a subset of users first.
Also read: Palantir CEO Alex Karp calls AI labs 'Marxist' after record $1.9B quarter
Spotify’s approach: consent and compensation over ‘fake artists’
During the earnings call, Spotify’s co-CEOs were careful to distinguish the product from AI music startups that generate fully artificial tracks. “We want artists to be consenting [to add] their work into this catalog, so people can play around with covers and remixes based on their art,” co-CEO Alex Norström told investors. “We also obviously want to give them credit. And last but not least…we not only have the consent and give credit, but we also drive the compensation for this.”
Co-CEO Gustav Söderström echoed that framing, describing the product as being about “real artists, not fake artists.” He argued that the feature is distinct from the broader wave of generative music tools. “Normal generative music will happen with or without us,” he said. “This product will not happen without us, and it needs to exist so that existing artists can participate in this.”
Also read: DesignArena creators raise $7.9M to scale human taste-testing for AI models
Spotify previously said the tool will launch as a paid add-on, creating an additional revenue stream for artists. The company also noted it would not require a full music catalog to get started, suggesting a phased rollout.
Why this matters for the music industry
The partnership comes as AI-generated music floods streaming platforms. Deezer reported recently that more than 50% of daily track uploads were generated with AI, up from 10% in January 2025. That surge has fueled concerns among labels and artists about unauthorized cloning and copyright infringement.
Spotify’s product is an attempt to create a licensed, revenue-sharing alternative to that wave. By partnering with Merlin and UMG, the company is building a catalog of artists who have opted in, rather than scraping or mimicking existing work without permission. The approach mirrors broader industry efforts to establish AI licensing frameworks, such as the deals struck between major labels and AI music companies like KLAY Vision and Vermillo in late 2025.
For independent artists, the Merlin deal could be significant. Many smaller labels lack the resources to negotiate individual AI licensing agreements. Merlin’s network gives them a pathway to participate in a major platform’s AI features without needing a direct deal with Spotify.
What to watch next
Spotify has not specified when the research preview will arrive, nor has it detailed pricing for the paid add-on. The company’s positioning suggests it is betting that a consent-based model will be more defensible legally and more attractive to artists than the unlicensed AI tools currently proliferating.
The broader question is whether fans will embrace the feature. Remix culture is already deeply embedded in streaming, and Spotify’s version could offer a legal, monetized outlet for that creativity. But its success will depend on how many artists opt in and how the compensation is structured. As the product moves from preview to public launch, those details will determine whether it becomes a meaningful new revenue stream or a niche experiment.
This article discusses a product that has not yet launched and includes statements from Spotify executives about its planned features. Forward-looking statements are subject to change, and the product’s final form may differ. This content is for informational purposes only and does not constitute financial advice. Music streaming and AI-related markets are volatile and uncertain.
