Universal Music, Warner Music in advanced talks to license songs to AI startups

Universal Music Group and Warner Music are in advanced discussions to secure landmark licensing agreements with AI firms. If it materializes, the deal could set the framework for how the music industry manages AI-generated content.

The Financial Times reported on Thursday, citing sources familiar with the matter, that the two record label giants could each finalize deals within the coming weeks. 

Universal and Warner, which represent global musical artists including Taylor Swift, Kendrick Lamar, Charli XCX, and Coldplay, are reportedly in talks with both emerging AI start-ups and large technology companies.

Universal and WMG negotiate with AI start-ups and tech groups

According to sources speaking to the FT, the discussions involve ElevenLabs, Stability AI, Suno, Udio, and Klay Vision. The music groups are also holding talks with Google and Spotify.

The labels see the talks as an attempt to get ahead of a disruptive technology, a lesson learned from the early days of the internet. The digital music revolution in the late 1990s and early 2000s caused devastating losses for the music industry, and executives want to avoid repeating those mistakes.

The people with knowledge of the matter confirmed that topics in discussions include licensing songs for use in AI-generated music tracks and training data for large language models (LLMs). The record labels are asking AI platforms for a payment structure similar to music streaming, where each play of a song generates a micropayment.

UMG and WMG want AI developers to create attribution tools similar to YouTube’s content ID. It would make it possible to identify when copyrighted music is being used in AI systems and trigger royalty payments.

While it was not immediately clear which companies are closest to reaching a deal, insiders said some agreements may be weeks away. 

Sony Music, home to artists including Adele and Beyoncé, confirmed it is also in discussions with AI developers. “We are in discussions with companies that have ethically trained models and that benefit our artists and songwriters,” the label said in a statement.

Calls for AI licensing grow amid copyright claims

Industry sources said the major music labels hope these talks will set a clear precedent for how AI platforms compensate artists and rights holders. However, the structure of payments and licensing rules may vary in different companies and platforms.

In September, Spotify disclosed it had taken down 75 million tracks over the past year, nearly half its entire song library, due to a surge of AI-generated spam and fraudulent uploads.

Industry insiders said the volume of new AI-produced music is overwhelming legitimate artists and diverting listeners’ attention. In Latin America, Reggaeton star Bad Bunny had to call out a song using an AI clone of his voice after it briefly entered Spotify’s top 100 chart in Chile before being removed.

Moreover, French streaming company Deezer revealed last month that nearly one-third of the tracks uploaded to its platform were AI-created. 

Elliot Grainge, chief executive of Atlantic Records, compared today’s AI moment to the industry upheaval two decades ago. “We saw an industry lose 50, 60, 70 per cent of its value,” Grainge said, referring to the impact of illegal downloading in the early 2000s.

“Labels have a responsibility to negotiate the best deals for their artists, and they’re really good at that. They learned from their mistakes in the past. They understand survival now because of that tumultuous period,” Grainge told the Financial Times last month. “I have great faith in the soon-to-be marriage between rights-holders, artists, and these AI platforms.”

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