Spotify stock erases 5% gain after Google unveils music AI feature

Spotify stock erases 5% gain after Google unveils music AI feature

Louis Juricic

Thu, February 19, 2026 at 1:51 AM GMT+9 1 min read

In this article:

GOOG

+0.46%

SPOT

+2.78%

Investing.com – Spotify (NYSE:SPOT) stock erased a 5% gain in minutes Wednesday morning after Google (NASDAQ:GOOGL) announced its Gemini AI can now create music, introducing uncertainty about potential impacts on the streaming platform. The stock swung from up 5% to flat before settling at a 2% increase.

Google’s new Lyria 3 music generation model, released in beta to Gemini app users, allows creation of 30-second tracks using text prompts or uploaded images. The feature can generate vocal and instrumental compositions across various genres with automatically created lyrics.

The technology represents a significant advancement with three key improvements: automatic lyric generation, enhanced creative control over musical elements like style and tempo, and the ability to produce more complex compositions.

Users can create music by describing their ideas in text or by uploading photos that the system analyzes to generate matching tracks. Each creation includes custom cover art made by Google’s Nano Banana image generation system.

Google has implemented SynthID watermarking to identify AI-generated content and expanded verification capabilities to detect AI audio alongside existing image and video detection. The company is also integrating Lyria 3 into YouTube’s Dream Track feature for content creators.

The feature avoids mimicking specific artists, instead using artist names as general creative inspiration. It’s available to users 18 and older in eight languages with higher usage limits for Google AI Plus, Pro, and Ultra subscribers.

The market reaction reflects broader investor uncertainty around AI’s impact on established music platforms, with selling pressure recently seen in companies potentially disrupted by artificial intelligence advancements.

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