Warner Music fights union lawsuit over AI music deals

Warner Music Group has asked a US court to dismiss a lawsuit filed by the American Federation of Musicians over licensing agreements with artificial intelligence companies Suno and Udio. The motion, filed on Friday, argues the union's case is an "improper attempt to place a judicial thumb on the negotiation scales."

The union sued both Warner and Universal Music Group last month. It claims the labels breached the Sound Recording Labor Agreement by allowing AI firms to train their models on licensed music "without compensation or credit" for the performers. The union also accused the labels of refusing to disclose which specific recordings were being used.

Warner's legal team contends that because AI platforms like Suno and Udio "did not exist" when the original artist contracts were signed, the label has no liability to pay additional compensation for AI training. "Because no contract entitles AFM members to any portion of AI licensing revenues, neither AFM nor its members have been injured," the filing states.

This legal confrontation carries significant weight for Europe's music economy. Universal Music Group, the other defendant in the case, is headquartered in Paris and controls a vast catalog of European recordings. How US courts interpret "new use" provisions in legacy contracts will likely dictate the negotiating leverage of European artists and their representatives.

European collection societies and local unions are watching the case closely, as they face identical questions regarding how older contracts apply to modern machine learning techniques.

Warner settled copyright infringement disputes with both Suno and Udio late last year. The label framed the Udio settlement as a way to "create new revenue streams for artists and songwriters" through a "licensed AI music creation service." A subsequent deal with Suno was described as a measure to "compensate and protect artists" while giving them "full control over whether and how their names, images, likenesses, voices, and compositions are used in new AI-generated music."

The core question for investors and rights holders is whether those promised revenue streams will actually reach performers. If Warner succeeds in dismissing the lawsuit, major labels could secure lucrative AI licensing fees without triggering contractual obligations to share those specific proceeds with session musicians. That outcome would establish a financial framework for AI integration that prioritizes corporate margins over labor agreements, setting a baseline for future European licensing negotiations. For investors, resolving this ambiguity is crucial to accurately valuing music catalogs as AI-generated audio expands its market share.