Baillie Gifford says Spotify (SPOT) could improve with AI-driven personalization and richer listener data

Spotify Technology S.A. is in the crosshairs of a fresh investor note that argues the streaming platform could capture more value by using artificial intelligence to personalize listening and turn behavior into more actionable listener insights.

The comments were published in Baillie Gifford & Co’s third-quarter 2026 investor letter for its “International Concentrated Growth Strategy.” Baillie Gifford said it believes Spotify could benefit from AI-driven personalization, framing it as a way to improve the listening experience while generating a clearer view of what users respond to over time.

AI-driven personalization typically means using machine learning models to recommend music, podcasts, and other audio content based on a listener’s history and patterns. Baillie Gifford’s central point, as described in the market coverage, is that better personalization can help Spotify keep listeners engaged and potentially improve performance across both music and podcast discovery.

The investor letter also emphasized “deeper listener insights,” a phrase that generally points to using data and analytics to understand preferences, churn risk, and engagement drivers. In Spotify’s business model, those insights matter because they can feed product development and improve how content is surfaced, while also supporting the targeting and measurement that advertisers and partners seek.

The market write-up did not provide detailed figures, timelines, or specific product initiatives from Spotify. It also did not describe whether Spotify has already deployed a particular AI recommendation system, or whether the changes Baillie Gifford expects are imminent versus longer-term. The note was presented as an investment-management perspective rather than a company announcement.

Spotify, for its part, describes an ecosystem built around personalized recommendations and discovery across its music and podcast services, plus advertising products that rely on knowing what audiences do. Without additional disclosures from Spotify tied directly to the investor letter, it is not possible to confirm in the available coverage how AI is being applied or what measurable outcomes Baillie Gifford expects to see.

Sector context matters. Media and telecom businesses that monetize attention increasingly compete on data advantage and relevance, not just catalog size. For Spotify, the argument aligns with a broader industry shift toward personalization powered by AI, where platforms try to improve engagement metrics by tailoring what each listener sees and hears next.

For readers trying to separate aspiration from execution, the next step is to watch for Spotify disclosures that specify how its AI personalization works in practice, what performance metrics it is expected to move, and whether any new listener-insight capabilities show up in product updates or advertising measurement improvements.