Spotify does not need licensing deals with every major record company before it can launch its AI-powered covers and remixes tool. That is the position Co-CEO Gustav Söderström laid out on the company's Q2 2026 earnings call on Tuesday, August 4 — the same day Spotify announced a licensing agreement with Merlin, the licensing body for independent labels and distributors, covering the upcoming tool.

The Merlin deal opens the door for artists across the 30,000 labels in Merlin's network to opt their catalogues into the AI-generated covers and remixes product, according to Spotify's newsroom. It is a paid add-on for subscribers, as Music Week reported. Merlin had already licensed its members' recordings to AI music platform Udio in January 2026, making the Spotify agreement its second major AI licensing move this year, per Music Business Worldwide.

Spotify struck its first label agreement for the product with Universal Music Group on May 21, 2026, when UMG was unveiled as the launch partner. Deals with Warner Music Group and Sony Music had not been announced as of the Q2 earnings call. In October 2025, all three majors plus Merlin and Believe had announced a broader partnership with Spotify to develop what they called "artist-first AI music" — but the specific licensing agreements for the covers and remixes tool are being negotiated separately, and not all are yet in place.

Söderström framed the incomplete set of deals as no obstacle. He cited Spotify's own history as precedent, noting that the service launched without significant parts of the catalogue and that a full catalogue has never been a prerequisite to going live, according to Music Business Worldwide.

The next step, Söderström said, is a research preview released to a subset of users. The goal is to collect preference data that improves the underlying AI model through reinforcement learning — a training method where user feedback shapes how the system generates output. He pointed out that Spotify has 777 million listeners to draw on for that process.

For fans, the tool is designed to let them create covers and remixes of songs by participating artists. Whether Warner and Sony holdouts affect what listeners can actually remix remains a question of catalogue depth, not of the product launching at all. The majors whose deals are done will have their artists' work available; those still negotiating may not, at least at the start.

The music industry's three largest labels — Universal, Sony and Warner — together control the majority of global recorded music revenue. Merlin's independent network represents tens of thousands of labels and distributors that sit outside that major-label system. A November 2025 agreement between Spotify and the NMPA, the US trade body for music publishers, also opened a path for publisher members to license expanded audiovisual rights directly, according to Spotify's newsroom.

What stands out is Söderström's framing. Rather than waiting for every rights-holder to sign, Spotify is signalling it will move with whoever is ready — and use its listener base as the engine to refine the product as it grows. The labels not yet on board face a choice between joining on Spotify's timeline or watching their artists' songs sit out of a feature their competitors' artists are already in.