Sources say the negotiations are focused on licensing models that would allow music to be used both to create new AI-generated tracks and to train large language models. The record labels are pushing for a system in which every use of protected music would trigger a small payment, similar to the royalty model used by streaming services. To make this possible, AI companies would have to develop tools to track and identify music in their outputs, similar to YouTube's Content ID, for example.
Payment Models
Compensation is at the heart of the discussions. Universal and Warner are proposing a structure in which every use of a song in an AI system would result in a micropayment to the rights holders. This approach is based on existing streaming models, where payment is made for each play. For example, if an AI model generated a track containing elements from Universal Music Group's catalog, it would trigger an automatic payment. The same would apply to music used to train models, with record labels demanding clear rules for identification and compensation.
Reports mention that the agreements could also include settlements for past unauthorized use of music. For example, the disputes with Suno and Udio concern allegations that AI was illegally trained on protected recordings, which could be addressed as part of the final contracts. Google, as YouTube's parent company, and Spotify are among the key partners, but there are no direct mentions of SoundCloud in these negotiations.
Impact on the Music Industry
These agreements could set standards for the entire sector. Record labels such as Universal and Warner are seeking to protect their catalogs from uncontrolled use in AI, ensuring that artists receive a share of the value generated by new technologies. For example, Stability AI, known for its content-generation models, would have to implement tracking tools to ensure that payments are allocated correctly. Similarly, ElevenLabs, which focuses on voice technologies, would have to address how music affects its outputs.
Sources describe the record labels as viewing these negotiations as a way to avoid the mistakes made during previous digital shifts, such as the rise of streaming. Rather than taking a passive approach, they are actively shaping the rules to ensure that AI also benefits music creators. For example, Klay Vision, another startup involved in the talks, would have to adapt its systems to these requirements.
Lawsuits
Some AI companies remain in conflict with record labels. Suno and Udio are facing lawsuits from Universal Music Group, Sony, and Warner over alleged copyright infringement resulting from training their models on music without permission. These disputes could be resolved as part of the new agreements, under which the record labels would grant licenses in exchange for compensation. Reports suggest that the negotiations are at an advanced stage and that final contracts could be signed within a few weeks.
Source: ft.com theverge.com
