AI Crushed Music Label Stocks. Why ‘Fake Drake’ Won’t Kill Them.

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In April, a catchy new duet was uploaded to music-streaming services by an anonymous user. Listeners who tuned in heard Drake’s voice pumping through their headphones, crooning, “I got my heart on my sleeve with a knife in my back. What’s with that?” Fellow megastar The Weeknd seemed to agree with Drake’s romantic struggles. His voice cried out, “I put her in the past.”

The two Canadian singers may have been telling the truth about love, but their supposed collaboration wasn’t technically real. Neither artist had contributed his voice to the song, called “Heart on My Sleeve.” It was built with artificial intelligence, the software that’s already remaking the tech and media world.

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The rise of AI has the music industry on edge, and has contributed to a drop in the stocks of some key companies. Universal Music Group (ticker: UNVGY), which represents Drake and The Weeknd, is down 10% this year despite statistics showing that people are streaming much more music this year than last. Rival Warner Music Group (WMG) has fallen more than twice as much. 

AI is dangerous to existing industry players, and appears to be weighing on their stocks, because it can divert money away from musicians and music labels and toward people using technology to mimic them. Its emergence comes at a tough time for some of the industry’s big players. A decline in advertising rates and concerns about a slowdown in the growth rate of streaming-music subscriptions have already been weighing on the shares of music labels.