Spotify is retooling for the generative artificial intelligence (AI) era, co-president Gustav Söderström said on July 29, as the audio streaming giant aims to capitalise on the potential of the rapidly evolving technology.
The first step in that effort is rebuilding the company’s technology stack to 'bring personalisation to a whole new level' in a bid to increase user engagement.
"Previously, when we constructed algorithmic playlists for our users, we were confined to guessing the tracks they might want based only on past listening, using signals like plays, saves and skips. Now, with generative AI, users can finally tell us in plain English what they actually want, what’s on their mind, and even what they’re doing right now," Söderström said during the company's earnings conference call on July 29.
He added that these are often things the streaming service would have found impossible to understand from listening data alone. User signals such as skips, plays, and saves are 'blunt signals', he says.
For instance, Söderström explained that skipping a song could mean a user loves the track but is tired of it, or that they love it but it's the wrong situation. It could also simply be a song they don’t like, yet all of these cases result in a skip.
With generative AI, users can just speak to the service in natural language. This expands Spotify’s ability to understand the relationship between language and music preferences.
Söderström, who also serves as Spotify's chief product officer and chief technology officer, said the company already had a "unique data set from its playlists, which was essentially song-to-song relationships — like, which song goes well with another? Similar to the Amazon model of ‘people who bought this also bought that.’ And we have the largest such data set in the world."
"You can think of it as us getting a new data set on what English sentence corresponds to what song. That’s completely new to us, and it’s a very, very valuable data set that we are collecting quickly. This is a big change for us," he said.
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Spotify's GenAI efforts
Spotify’s early efforts in generative AI are reflected in features such as AI DJ and AI Playlist, currently available to the company's premium subscribers in several markets.
AI DJ provides music recommendations alongside commentary around the tracks and artists in a human-like AI voice. The feature recently introduced voice requests, allowing users to talk directly to the DJ and ask for music based on mood, genre, artist, or activity.
For example, a user might say, "Play me that song where Bruce Springsteen invites a fan on stage in the music video," and the DJ will recognise that they are requesting the 'Dancing in the Dark'.
Meanwhile, AI Playlist enables people to generate personalised playlists by typing natural language prompts into a chat window. One can use prompts that reference places, animals, activities, movie characters, colors, or emojis.
Söderström said “millions” of users have created playlists so far, with many listening for longer and saving them more often, an indication of growing engagement. "We also clearly see that the more people interact with DJ, the better and longer their sessions become. This has led to a nearly 45 percent increase in DJ streams globally, driving tens of millions of interactions to date," he said.
According to Söderström, generative AI will pave the way for significant changes in user experience in the coming years.
"This technology lets us move beyond what are today largely predicted user experiences, where we try to guess what songs, playlists, podcasts, or audiobooks you might want to listen to, toward what’s now being called 'reasoned' user experiences, where you reason over the user's listening history and what they said," he said.
Speeding up product development
Apart from user-facing features, Spotify is also tapping into generative AI to speed up product development, particularly with faster prototyping to test whether something actually works.
"We are retooling the entire technology stack for the generative AI age. This means wrapping all the APIs in MCPs (model context protocols), so that you can have an agentic infrastructure on top of your old-school tech infrastructure, and create a product on the fly just by writing something in English," Söderström said.
He added that non-technical functions such as finance are also adopting the technology to boost internal productivity.
"We expect 2025 to be a standout year for Spotify and this quarter brings us up one step closer to that goal of 1 billion subscribers. Looking ahead, we will keep pushing boundaries through innovation, bringing even more value to users and creators" said Spotify CEO Daniel Ek during the call.
Spotify added 18 million monthly active users (MAUs) in the second quarter of 2025, taking its overall base to 696 million users. This was the firm's second-highest net additions in a second quarter.
Paying subscribers grew by 12 percent year-on-year to 276 million, led by 'outperformance' in Latin America, Europe, North America and Rest of World regions.
Total revenue rose 10 percent YoY to €4.19 billion for the quarter. However, the company posted a net loss of €86 million due to the so-called social charges, or higher payroll taxes linked to employee salaries and share-based compensation awards in certain countries.
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