Spotify Technology (SPOT) and Universal Music said Thursday they have reached a recorded music and music publishing licensing agreement, enabling users to create covers using generative AI technology.
Under the agreement, Spotify will launch a new tool allowing users to create covers and remixes of songs from participating artists.
The new tool will be launched as a paid add-on for Spotify Premium users, the companies said.
The tool will create an additional source of income for artists as they share in the value generated through licensed covers on Spotify, they added.
Spotify shares were up more than 16% in Thursday's trading.
Price: $505.71, Change: $+72.39, Percent Change: +16.70%