While generative AI introduces novel complexities, the fundamental conflict over artist compensation is not new. Historical examples, like musicians' families suing record labels over royalties, show these battles predate AI. AI's use of training data without permission has simply become the latest, most complex iteration of this long-standing issue.

Suno's counterintuitive bet was that AI makes creation so personal that creators become the primary listeners of their own music. This validated a novel monetization strategy focused on the act of creation and self-consumption, not just broadcasting to an external audience.

The rise of AI music has created a significant challenge for streaming platforms. Fraudsters upload vast quantities of AI-generated music and use bots to generate plays, illegitimately collecting royalties. This industrial-scale "slop" problem threatens the financial integrity of the entire streaming ecosystem.

While increasing subscription fees due to its market dominance, Spotify is simultaneously leveraging AI-generated music. This strategy could significantly reduce its largest expense—artist royalties—by populating background-listening playlists with royalty-free AI tracks, creating a powerful profit engine.

To handle royalties for AI-generated music, platforms can analyze the final audio file to algorithmically determine the likely prompt (e.g., "Taylor Swift singing a Gunna song"). This allows for fair royalty splits between the referenced artists, creating a viable monetization path.

STEM FM is challenging the standard music royalty model with a time-based system. An artist's earnings from a subscriber are directly proportional to the percentage of that user's total listening time. This better rewards deep engagement over simple stream counts, aiming for a fairer payout structure for artists.

Beyond AI infrastructure providers (NVIDIA, AWS), a key opportunity lies in the 'layer below'—companies like Uber and Spotify. They leverage big tech's tools but dominate specific verticals because they possess superior, niche-specific user data, which AI then supercharges for monetization and personalization.

Historically, the value of content IP like scripts and music declined sharply 30-60 days after release. AI tools can now "reimagine" these dormant libraries quickly and cost-effectively, creating new derivative works. This presents a massive, previously untapped opportunity to unlock new revenue streams from back catalogs.

Platforms like Spotify and Shopify thrive in the AI era because their value is in aggregation and backend infrastructure, not creation. AI-generated music or stores still need distribution and checkout services, making these platforms net beneficiaries of an explosion in AI-driven content and commerce.