Spotify Shares Drop 8% as AI Push Lifts Costs Despite 300 Million Premium Users
Updated
Updated · Gizmodo · Aug 4
Spotify Shares Drop 8% as AI Push Lifts Costs Despite 300 Million Premium Users
3 articles · Updated · Gizmodo · Aug 4
Summary
Spotify closed down 8% after executives tied higher spending to an AI push even as quarterly users reached 777 million and Premium subscribers hit 300 million.
The company said it is betting AI can both improve products and drive paid growth, citing its new “Talk to Spotify” chatbot-style feature for Premium users.
Spotify is also expanding into AI-generated music with Universal Music Group and Merlin, planning a paid add-on for legal remixes and covers built around artist consent, credit and compensation.
At the same time, executives said they are adding more ads and other limits to the free tier to push more listeners toward subscriptions.
The strategy extends Spotify’s broader growth plan after Q2 revenue rose 14% to €4.8 billion, but investors appeared focused on the cost and execution risks.