Spotify executives shared new details about an internal bug-fixing tool they call Honk on Tuesday and issued a loud call to music industry rightsholders to strike licensing deals that let fans interact with artists’ music, possibly using AI, on the streaming platform.
The streaming giant reported strong fourth quarter revenue and subscriber growth that beat expectations. But that growth was in the rearview mirror during a call discussing earnings, as founder Daniel Ek and co-CEOs Gustav Söderström and Alex Norström focused almost entirely on Spotify’s AI ambitions.
“We know that there will be winners and losers, but there is no question in my mind that we will continue to be one of the big beneficiaries of AI,” Söderström said.
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Here are the highlights of what executives said on their fourth quarter earnings call.
What are they building?
As an example of what they can do with AI, Spotify shared details for the first time about an internal tool called Honk, which uses Anthropic’s AI model Claude to fix bugs and add new features to the streamer’s platform. Söderström described a theoretical Spotify engineer using Slack to ask Claude to solve a problem or add a feature to Spotify’s iPhone app while commuting to work.
“We are a tech company, and we consider ourselves the [research and development] department for the music industry,” Söderström said, highlighting its acquisition of AI-voice platform Sonantic in 2022 and the recent launch of Spotify’s interactive DJ and prompted playlists. “Our job is to understand new technologies quickly and capture their potential.”
Söderström said Spotify has the “technology and capabilities ready” for fans and artists to create derivative works, like remixes, using AI, and called on music companies to strike licensing agreements that would allow Spotify to go forward.
“We think [derivative works, like remixes] is an untapped opportunity for artists to make money off of their existing IP,” said Söderström. “We have the technology and capabilities that we need, and we are ready for the for the partners that are hungry to seize this opportunity. We think the ones that move first will benefit the most. We’re hungry and excited … We’re there for people who want to make money.”
Spotify does not think AI music software companies will replace it.
Leading AI music creation software company Suno said last year it aims to create a “high-value, high-intent music discovery” ecosystem where music can be created, streamed and shared.
While not naming a specific company, Söderström said Spotify feels good about the increased volume of music created by AI software because creators, drawn to Spotify’s reach and monetization opportunity, upload that music to Spotify.
“There are tons of AI companies that let you create new music,” Söderström said. “But that’s not where the music breaks. It breaks on Spotify. We feel very comfortable about that position.”
Spotify is in talks with music industry stakeholders about its AI plans, and co-CEO Norström says they have widespread support.
“I’ve done the rounds, and no rights holder is against our vision,” Norström said. “We pretty much have the whole industry lined up behind us. We want to do it in a controlled way, respecting artists and the community.”
Spotify’s most senior engineers aren’t even writing code anymore.
Since December when Anthropic’s Claude Opus 4.5 was released, Spotify’s most senior engineers say they have not written a single line of code, says Söderström.
“They actually only generate code and supervise it,” says Söderström. “It is a big change. It is real, and it’s happening fast now, as I said. We’ve discussed for the last at least 1.5 years not if this should happen, but when it should happen.”