Key highlights
- Generative AI and stem separation tools grew revenue 651% between 2023 and 2025, reaching $333 million.
- The segment now has 63 million monthly active users, putting it on scale with mid-tier streaming services.
- Average revenue per user sits at $5.29, far below what users pay for a streaming subscription, signaling significant pricing headroom ahead.
AI music tools hit streaming scale, quietly
The 2026 IMS Electronic Music Business Report, authored by MIDiA Research’s Mark Mulligan and presented at IMS Ibiza on April 22, contains one number that deserves more attention than it’s getting: 63 million monthly active users for generative AI and stem separation tools. That’s not a niche. That’s mid-tier streaming service territory.
Revenue for these tools reached $333 million in 2025, up 651% since 2023. The global electronic music industry itself hit a record $15.1 billion. The AI creator tools segment is one of the fastest-growing pieces inside it.
What the IMS Business Report found
Mark Mulligan presented the 12th edition of the IMS Business Report to a packed room at IMS Ibiza. The report covers the full electronic music economy: recordings, publishing, DSPs, festivals, clubs, creator tools, merch, and sponsorships.
On AI specifically, the report groups generative AI tools (text-to-music generators like Suno and Udio) and stem splitting for DJs together as the two categories behind the 651% revenue surge. Both categories crossed from niche to mainstream over the same two-year window.
The broader picture is diversification. Streaming grew slower than the overall industry for the first time in 2025, according to Mulligan. Publishing was up 11%. Physical revenue saw “massive growth.” Creator tools, as a category, grappled with the impact of AI on traditional software sales.
The $5.29 user and the pricing gap nobody is discussing
The takeaway: At $333 million across 63 million users, average revenue per user for AI music tools sits at approximately $5.29. A Spotify subscription runs around $60 per year. That gap is not a sign of weakness. It’s a sign of early-stage pricing in a segment that has barely started charging for what it delivers.
Most public debate about AI music fixates on copyright lawsuits and streaming fraud. The IMS Ibiza 2026 report focuses on something different: the creation side, not the consumption side. The 651% growth rate dwarfs early streaming adoption curves. The closest historical parallel is the DAW democratization wave of the 2000s, when GarageBand and FL Studio brought production to bedrooms and expanded the creator base from thousands to millions.
AI tools are now pushing that creator base from millions to tens of millions. Non-DAW music software revenues declined over the same 2023–2025 period, signaling a direct substitution effect. Producers are choosing AI-powered mixing and mastering tools and stem splitters over traditional plugins. The AI VST plugin category sits at an interesting inflection point: compete with AI-native tools or get absorbed by them.
What this means for producers right now
If you produce electronic music, you’re already in the segment the MIDiA Research IMS report identifies as the fastest-growing in the industry. That matters for two reasons.
First, the tools are underpriced relative to their value. Early adopters are getting professional-level capabilities at hobbyist pricing. That window closes as platforms mature and raise prices toward what the market can bear.
Second, the producers building AI workflows now will have a cost and speed advantage when pricing normalizes. Stem separation is already a foundational DJ and remix workflow. Generative AI is moving in the same direction for initial sketching and chord work. The seven key takeaways from Billboard’s IMS coverage frame this as a long-term structural shift, not a spike.
The $15.1 billion figure makes for a good headline. The 63 million MAU figure is the one worth watching. That’s the number that tells you adoption has already happened.
Frequently asked questions
How much did AI music tools revenue grow between 2023 and 2025?
According to the 2026 IMS Electronic Music Business Report, revenue for generative AI and stem separation tools grew 651% between 2023 and 2025, reaching $333 million. The segment reached 63 million monthly active users over the same period.
What is the IMS Electronic Music Business Report?
The IMS Business Report is an annual statistical breakdown of the global electronic music industry, authored by MIDiA Research’s Mark Mulligan and presented each year at IMS Ibiza. The 2026 edition is the 12th. It covers recordings, publishing, DSPs, festivals, clubs, creator tools, merch, and sponsorships, and reports a total industry value of $15.1 billion for 2025.
Which AI music tools are driving the revenue growth?
The IMS report groups generative AI tools (text-to-music generators) and stem separation tools together as the two categories behind the 651% growth. Both categories have moved from niche to mainstream use. Stem separation has become a standard workflow for DJs and producers, while text-to-music generators have opened production to a new wave of creators without DAW backgrounds.
Is AI replacing traditional music software?
The IMS report notes that non-DAW music software revenues declined over the 2023–2025 period, the same window in which AI tool revenue surged 651%. This points to a direct substitution effect in some categories. DAWs themselves remain essential, but standalone plugins and traditional effects processors face competition from AI-native alternatives.
