Music giants begin negotiating AI licensing rights for labels and artists

As artificial intelligence’s influence continues to spread deeper into pop culture, major record labels are starting negotiations with AI companies to ensure they—and their artists—are properly compensated when their music is used to train large language models.

Sony Music, Warner Music, and Universal Music Group reportedly have begun talks with Suno and Udio, a pair of generative AI startups that allow users to compose new tracks. That could set the bar for how much artists and labels will be paid for their influence on AI-created music—and set up a tracking system that ensures they are accurately compensated for the frequency of use.

The negotiations come as Suno and Udio are facing a lawsuit from the Recording Industry Association of America, which accuses the two companies of copyright infringement. The labels also filed suit against the AI companies last year, a case which is still pending.

Suno, though, in its answer to the complaint, stopped just short of saying it had used copyrighted materials to train its models, stating that its “training data includes essentially all music files of reasonable quality that are accessible on the open internet, abiding by paywalls, password protections, and the like, combined with similarly available text descriptions.”

Suno and Udio argued that their use of the material falls within “fair use” exemptions.

“What the major record labels really don’t want is competition,” Suno wrote in its response to the suit from the labels. “Where Suno sees musicians, teachers, and everyday people using a new tool to create original music, the labels see a threat to their market share.”

The record labels are pushing to develop fingerprinting technology that would determine how and when a song is used in the creation of AI music. They’re also looking to be included in the music products Suno and Udio release, with influence over the development and parameters of new products.

Universal Music Group, which is home to Taylor Swift, Lady Gaga, and Drake, has a history of being particularly rigid during these sorts of negotiations. Last year, the company’s standoff with TikTok resulted in it pulling its songs from the short-form social media juggernaut, then demanding the app remove any music credited to a songwriter signed to UMG.

“There must not be free rides for massive global platforms . . . that refuse to meaningfully address issues around AI or platform safety, or pay their fair share for our artists’ and songwriters’ work,” UMG CEO Lucian Grainge said at the time.

All of the labels are also demanding that artists have the option to opt out of select AI use cases. Several artists last year signed an open letter that was critical of AI, including Billie Eilish, Billy Porter, Jon Batiste, and Jon Bon Jovi. The letter called for controls on AI music that would “infringe upon and devalue the rights of human artists.” Also included among the signatories were the estates of Frank Sinatra and Bob Marley, which have seen those artists revived through AI to cover songs from other artists. 

Music companies are the latest to negotiate with AI firms after initial resistance. Several book publishers and news organizations have agreed to deals, including News Corp., Politico/Business Insider publisher Axel Springer, Reuters, The New York Times, and Vox Media.

While the talks are still early (and are being done independently by each of the labels instead of as a collective group), should they be successful, they will likely end with the music labels taking an ownership stake in the startups (as they have in streaming services like Spotify). There also will likely be some sort of financial settlement to end the existing lawsuits.