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Spotify Says AI Remix Tool Has ‘Strong Momentum’ and AI Investments Are ‘In Our Control’
Spotify reported second-quarter 2026 results on Tuesday showing stronger-than-expected premium subscriber growth, which helped offset a slight miss on total user numbers and kept revenue in line with guidance. In their first public comments to investors since May's investor day, co-chief executives Alex Norström and Gustav Söderström said new products, including AI playlisting and remixing tools, were showing "strong momentum", and that spending on AI and marketing remained "entirely in our control".
Spotify added seven million net new premium subscribers, a million more than guided, taking the total to 300 million, while ad-supported monthly active users grew to 494 million. Total monthly active users reached 777 million, slightly below the 17 million net additions targeted. Revenue rose 14%, gross margin expanded to 33.4%, and operating income hit 655 million euros, even as operating expenses climbed 3% to 941 million euros on AI and marketing investment; shares dipped 1.5% to $479. Separately, indie label group Merlin joined Universal Music Group in licensing opted-in artists' music for Spotify's forthcoming AI remix tool, with Söderström saying a preview would roll out to some users despite scepticism among parts of the industry over AI-generated music.
In short
- Spotify beat subscriber growth targets in Q2 2026, meeting revenue guidance
- Premium subscribers hit 300 million; total users reached 777 million
- Merlin joins UMG licensing artists' music for Spotify's AI remix tool
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Spotify's AI investment reflects responsible innovation grounded in demonstrable industry support. The company secured licensing from Universal Music Group and Merlin for the remix tool, showing that major distributors and their constituent artists recognise value; spending remains disciplined and 'entirely in control'. AI remixing tools deepen user engagement and offer new creative opportunities for participating artists, representing natural evolution in music technology.
The case against
The music industry's documented scepticism about AI-generated music reflects legitimate concerns about artist compensation and creative devaluation. Whilst licensing arrangements create formal consent structures, platform dominance creates practical pressure on independent artists and smaller labels; the technology raises unresolved questions about fair payment for training data, potential cannibalization of human composition and mixing work, and whether participation is genuinely voluntary under industry momentum.
Explained simply
Spotify is a music streaming service with two main types of listeners: people who pay for Premium and people who use its free, advert-supported tier. Subscriber numbers, advertising and the cost of running the service all affect its financial results.
The company is led by co-chief executives Alex Norström and Gustav Söderström. Spotify is developing features that use artificial intelligence, including tools for making playlists and remixing music; record labels and artists can decide whether their music is included in the remix tool.
The debate matters because AI features could change how listeners discover and alter music, while raising questions about artists’ control over their work. For investors, the wider issue is whether Spotify can pay for new products and marketing while growing its audience and making a profit.
AI Entertainment Music Technology