Universal and Warner are Nearing a Major AI Licensing Deal

According to the Financial Times, major record labels Universal Music Group (UMG) and Warner Music Group (WMG) are very close to closing a “landmark” AI licensing deal with several prominent AI music companies.

The deal:

• WMG and UMG are negotiating with AI music companies ElevenLabs, Stability AI, Suno, Udio, and Klay Vision.

• The labels are also in talks with other larger companies, including Spotify and Alphabet, the parent of Google.

• Two key points of the deal are licensing label-owned songs for creating AI-generated tracks and using the labels' music to train large language AI models.

• The labels are pushing for a similar payment model to streaming. Where every individual stream generates revenue, one use of a song for AI would also generate revenue.

Background:

• All three major labels have predicated lawsuits against AI companies such as Suno and Udio in recent years, alleging illegal use of copyrighted material.

• This deal could be a significant step in the coalescence of the music industry and AI.