Spotify Embraces AI Agents From ChatGPT to Muse as New Growth Engine: ‘We Are Simply Everywhere’ - Spotify…
Spotify Technology S.A. (NYSE: SPOT) is welcoming the growth of AI assistants that can take action for users. The company believes that connecting Spotify with OpenAI's ChatGPT, Meta Platforms, Inc.'s (NASDAQ: META) Muse, and other AI assistants will help more people find and listen to its music without hurting its connection with listeners.
Spotify Wants to Be Available Through Every AI Assistant
Spotify's stock price rose 11.19% on Thursday, closing at $583.66. This happened even though the company earned less money and brought in less revenue than Wall Street analysts had expected for the third quarter. Investors were encouraged because Spotify continued to gain subscribers and monthly active users.
Before the stock market opened on Friday, Spotify shares were down about 0.39%, according to Benzinga Pro.
During the company's earnings call, co-CEO Gustav Söderström said Spotify wants to become the first choice for licensed music and other audio content across AI assistants. This would let people listen to music, podcasts, and audiobooks using assistants made by other companies.
"We are simply everywhere," Söderström said. He pointed to Spotify's connections with ChatGPT, Meta's Ray-Ban smart glasses, Muse, and OpenAI's Dots.
With this approach, people can ask AI assistants to create playlists that match their tastes or help them find music and other audio content. Spotify's own technology will still decide what to recommend and handle playing the audio.
Söderström said Spotify is "unusually well positioned" for a future where AI assistants do more tasks for people. He explained that Spotify can still make money from subscriptions and advertising, even when people listen through another AI assistant instead of opening Spotify directly.
Spotify Sees AI Assistants as a Way to Grow Its Business
Spotify does not see AI assistants as rivals. Instead, it wants to use them as more ways to reach listeners.
The company has also connected Spotify with Anthropic's Claude and announced a partnership with Meta's Muse to help people discover music that fits their personal tastes.
Söderström said Spotify's goal is to become "the media service that you use from any agent." In other words, the company wants the growing use of AI assistants to help its business succeed.
AI Connections Could Give Spotify More Information and Raise Privacy Questions
This plan could also help Spotify learn more about what listeners like. Söderström said that when people make requests through AI assistants, those requests might show interests that Spotify would not have known about otherwise. He said this could create a helpful cycle in which Spotify learns more about listeners and uses that information to improve its service.
He also said Spotify does not give its private, company-owned user data to outside AI assistants. Instead, Spotify's own technology handles requests and uses the information it has to decide what to play.
Spotify is also building AI tools to help people discover new content. The company is looking into paid features for covers and remixes created with AI. These efforts are meant to make Spotify's own service better while it also connects with outside AI assistants.
Spotify's Third-Quarter Earnings Were Below Expectations
Spotify reported earnings of $2.85 per share, which was lower than the $3.11 per share that analysts had expected on average. Its revenue grew 16% compared with the same period a year earlier, reaching 4.97 billion euros ($5.72 billion). This was slightly below Wall Street's prediction of $5.73 billion.
For the fourth quarter, Spotify expects revenue of 5.2 billion euros, or about $5.985 billion. That is lower than the $6.010 billion that analysts expect on average.
According to Benzinga Edge Stock Rankings, Spotify's stock, SPOT, has shown weak price trends over the short term. However, its medium-term and long-term trends are positive. The company also ranks in the 97th percentile for Growth, meaning its growth ranking is higher than about 97% of the stocks being compared.
Disclaimer: AI tools helped create some of this content. Benzinga editors checked it and published it.
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