What Is Spotify’s New AI DJ Feature and Who Can Access It?
Key takeaways
- Spotify has released its new AI DJ, which runs on OpenAI technology
- Spotify’s stock has soared 184% this year, despite mounting losses and tight profits
- Its subscriber base continues to grow, giving investors hope for the stock’s long-term future
Spotify has jumped on the AI hype bandwagon with the release of its very own AI-generated DJ playlist, which uses OpenAI’s GPT tech to run. It’s a savvy move from Spotify, which continues to grow its share price in 2023 despite concerning earnings figures — something traders should note, despite the giddying stock performance.
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What’s Spotify’s AI DJ?
The new Spotify AI-generated DJ, also known as DJ X, is named after Spotify’s head of cultural partnerships, Xavier Jernigan, and utilizes his voice. The idea is that the AI “knows you and your music taste so well that it can choose what to play for you” and mimics a radio show but personalized just for the user.
The news was first announced in February and the new feature has gradually been rolled out to more countries. The AI DJ is only available for premium Spotify subscribers. The tech runs on OpenAI’s GPT technology and Spotify’s acquisition from last year, Sonantic, is responsible for the lifelike AI-generated speech.
Having tested the feature out, it’s not wildly different from Spotify’s personalized playlists feature with a sometimes-jerky AI-generated voice interspersed throughout, but the potential for the tech is exciting — especially for investors looking to see how Spotify can further harness AI for its customers.
How is Spotify’s share price doing in 2023?
Spotify’s latest quarterly earnings report rang warning bells for investors, suggesting tight profit margins and the company’s losses deepening. Its gross profit margin was 25.2%, declining marginally from the previous quarter’s 25.3%. It also reported a €156 million operating loss for the quarter
Nonetheless, Spotify’s share price has repeatedly hit new 52-week highs this year and the stock has rallied an incredible 184% this year. Why is that the case when the earnings aren’t looking too hot? Because of the growth potential: Spotify has 515 million active users, increasing 5% from the previous quarter and 22% higher than the same period last year.
The bottom line
Spotify’s continued growth of its active users has impressed investors, and the company dipping its toes in the AI waters shows strong promise for the tech’s continued innovation in the music sector. The company’s next earnings report will reveal more about whether the eyebrow-raising figures from Q1 are a trend or a blip.
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