Major Labels Partner With AI Music Platforms
Record labels that once sued AI music generators are now licensing their catalogs to those same firms, creating new products that let users generate songs from text. While the deals promise fresh revenue streams, artists and unions question how compensation, consent, and rights will be handled, rai…
By Felo News Desk · Published
Two years ago, the biggest record labels—Universal, Warner, and Sony—filed lawsuits against AI music generators Suno and Udio, accusing them of using copyrighted songs without permission. The legal battles ended in 2024 with settlements that turned the tables: the labels now license their catalogs to the very companies they once sued. The first public example of this new partnership came earlier this month when Suno, a $5.4 billion AI music firm, launched models built with licensed tracks from Warner Music Group, BMG, and Believe. Udio, meanwhile, secured deals with Universal Music Group and Warner, positioning itself as a new revenue avenue for artists.
How the Deals Work
Each partnership follows a slightly different model. Udio operates a "walled garden" favored by Universal, meaning songs created on the platform cannot be downloaded or distributed outside the ecosystem. Suno allows users to download their creations, but places download caps and watermarks to curb abuse. Its new models can be released through Believe and TuneCore, giving artists a route to traditional distribution. Spotify, which was not part of the lawsuits, has also struck agreements with Universal and Merlin, planning a paid add‑on for Premium subscribers.
Under these agreements, artists can opt in to have their names, likenesses, voices, and compositions used in AI‑generated music. However, the contracts vary, and it remains unclear how opt‑out works—whether it excludes an artist’s recordings from training data or simply removes them from fan‑facing features.
Artist Concerns and Union Pushback
Musicians and songwriters are uneasy about the lack of transparency around compensation. The American Federation of Musicians (AFM) sued Universal and Warner in June, alleging that the labels licensed recordings featuring its members to Suno and Udio without paying the musicians or informing the union which tracks were involved. The labels have moved to dismiss the case.
Session musician Matt Evans, a 35‑year‑old Pasadena brass player, voiced his worries: "If I do something once and it can be reused without my consent, I lose the chance to earn additional money. The loss of income is the real issue." AFM International President Tino Gagliardi echoed these concerns, stating that licensing without consent bypasses the creators who made the catalogs valuable.
Legal Battles Continue
Not all labels have settled. Sony filed a second lawsuit against Udio over more than 30,000 recordings and continues to sue Suno alongside Universal, alleging ongoing copyright infringement. A Munich court ruled against Suno in a case brought by GEMA, the German royalty collection society. A proposed class action led by Jason Isbell claims that Suno’s platform allows users to generate songs that evoke specific artists’ identities without permission, a right‑of‑publicity claim.
Despite the legal friction, some industry voices see the partnerships as inevitable. Jonathan Wyner, head of artistic technology at Berklee College of Music’s Emerging Artistic Technology Lab, compared the AI deals to the rise of streaming services: "It’s a good step, and I think it was inevitable, especially if you want to stay engaged with musicians and the creative community." However, critics like Damon Krukowski of United Musicians & Allied Workers argue that the deals may ultimately harm working‑class musicians, potentially eroding the labor market.
What’s Next?
The industry is still in a testing phase. The first payouts to artists remain undisclosed, and it is unclear how the split between composition and sound recording rights will be handled when those rights are held by different parties. The outcome of Sony and Universal’s ongoing lawsuits will also shape the future of these partnerships.
For now, the debate centers on whether these AI‑powered revenue streams will truly benefit artists or simply provide labels with new ways to monetize existing catalogs. The next few months will reveal whether the promise of fresh income for musicians can be matched by fair compensation and clear consent.
Key facts
- Major labels now license catalogs to AI firms they sued
- Artists can opt in, but compensation details are unclear
- Unions and musicians raise concerns over consent and pay
- Legal battles continue over copyright and rights of publicity
- Industry sees parallels to streaming, but critics warn of job loss
Why it matters
These deals signal a shift in how music is created and monetized, raising critical questions about artist rights, fair pay, and the evolving role of technology in the creative economy.
Frequently asked questions
What are the main differences between Suno and Udio’s models?
Suno allows users to download and distribute songs with caps and watermarks, while Udio’s walled garden keeps creations within its platform and prevents external distribution.
Will artists automatically receive payment from AI-generated songs?
No; the agreements do not yet disclose how artists will be compensated, and opt‑in terms vary by contract.
Are session musicians protected under these deals?
Session musicians are concerned that their performances may be used without consent or compensation, and unions are actively challenging this practice.
Sources
- [1] latimes.com — originally reported as “Why some musicians aren't happy about labels signing AI deals with platforms”
