Spotify is making a bold move into the AI music space. On Thursday, the streaming giant announced a partnership with Universal Music Group (UMG) that will allow fans to use generative AI technology to create covers and remixes of their favorite songs. This new tool will be available as a paid add-on exclusively for Spotify’s Premium subscribers. It will also include a revenue-sharing model with participating artists for any AI-generated music based on their work.

Spotify did not reveal pricing or a launch date for the feature, only confirming that the two companies have reached a licensing agreement. However, the company had previously hinted at these plans last year, noting that it was collaborating with UMG, Sony Music Group, Warner Music Group, Merlin, and Believe to develop artist-first AI products. At the time, Spotify emphasized that these tools would be built through “upfront agreements, not by asking for forgiveness later”—a clear jab at competitors like Suno.

The principles Spotify outlined include giving artists and rightsholders the choice of whether and how to participate in AI tools, and ensuring fair compensation if they do. “Solving hard problems for music is what Spotify does, and fan-made covers and remixes are next. What we’re building is grounded in consent, credit, and compensation for the artists and songwriters that take part,” said Spotify co-CEO Alex Norström in a statement about the UMG agreement. “Through each technological transformation, we have worked together with Sir Lucian [Chairman & CEO, Universal Music Group] and his team to evolve the music ecosystem into a richer, more beneficial experience for fans and a more rewarding outcome for artists and songwriters.”

UMG Chairman and CEO Sir Lucian Grainge also praised the development, calling it a way for artists to deepen their relationships with fans while creating new revenue opportunities. It remains unclear which UMG artists have agreed to participate so far.

While services like Suno and Udio have been pioneers in AI music, they have operated on shaky legal ground. Major labels quickly filed lawsuits against them. In November, Suno settled a $500 million lawsuit with Warner Music Group, shortly after UMG settled its own case with Udio. Currently, Suno still faces copyright claims from UMG and Sony Music, while Udio has settled with Warner Music and UMG but is still working on a settlement with Sony.

Seeing strong consumer demand for this type of activity, Spotify chose to go directly to the labels to negotiate a deal. UMG may be the first of many such label partnerships, though Spotify did not explicitly confirm this. The announcement came amid a series of Investor Day updates from Spotify on Thursday, which also included an AI-powered audiobook creation tool, AI features for podcasters, a desktop app for producing personal podcasts using AI, and reserved concert tickets for top fans.