Spotify's AI remix tool lands Merlin deal, pulling 30,000 indie labels into a legal, paid sandbox

Spotify is betting big that the future of AI music isn’t about fake artists, but about giving fans a legal playground built on real catalogs. The company’s Q2 earnings call made that clearer than ever, with the announcement that Merlin — a licensing giant representing over 30,000 independent labels and distributors — has signed on for its upcoming AI remix and covers product. They join Universal Music Group, the first major to ink a deal.

The framing here is a direct shot across the bow of AI music startups flooding platforms with synthetic tracks. Co-CEO Gustav Söderström didn’t mince words, telling investors the product is about “real artists, not fake artists.” The scale of the synthetic music problem is staggering: Deezer recently noted that over 50% of daily track uploads are AI-generated, a massive leap from just 10% in January 2025. Spotify’s countermove isn’t to block AI, but to build a sanctioned, monetized environment for it.

“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 explained, emphasizing that creators will get both credit and compensation. He called it “the first legal way to partake in this AI tailwind.” It’s a clever bit of framing that turns a liability — the flood of unlicensed AI slop — into a feature that only a platform with Spotify’s licensing heft can offer. Söderström underscored that point bluntly: “This product will not happen without us.”

The tool will launch as a paid add-on, creating a fresh revenue stream for artists, with an initial research preview rolling out to a subset of users. Spotify noted it won’t need a full music catalog to get started, though no launch date was given. The real challenge is whether fan-created remixes, even with consent, can produce anything genuinely compelling — or if this just becomes another checkbox feature in a superapp that’s increasingly drifting from its music-discovery roots.