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AFM Pushes Back Against UMG and Warners Dismissal Motions in AI Licensing Lawsuit
In a legal clash that could reshape how AI‑generated music is paid for, the American Federation of Musicians (AFM) has taken a hard‑line stand against dismissal motions filed by Universal Music Group (UMG) and Warner Music Group (WMG). The dispute centers on whether the “new use” clause in the union’s collective bargaining agreements, specifically Article 21(a), obligates the labels to pay royalties for music produced by AI platforms Suno and Udio.
At the heart of the case is the question of what constitutes a “new use.” UMG and WMG, each represented by separate counsel, argue that Article 21(a) is a rate‑conversion provision that only applies when a negotiated rate already exists in another AFM agreement. They maintain that the clause does not grant a royalty for uses that lack a pre‑existing rate and that it offers no formula or benchmark for determining payment in an AI context. In early July, the labels submitted letters to the court supporting motions to dismiss, insisting that the clause’s language is limited to situations where a rate has already been established.
The AFM counters that Article 21(a) is ambiguous and can be interpreted to cover new uses that lack a pre‑existing rate. The union cites historical precedent: when music first entered the video‑game market, no AFM agreement had set a rate for that medium, yet the industry treated it as a new use for notification and payment purposes. The AFM also points to the Sound Recording Labor Agreement (SRLA), which sets rates for streaming services. It argues that an AI‑generated recording distributed on a streaming platform would fall under the SRLA’s rates, and that other AI uses—such as video‑game soundtracks, sampling, and commercial placements—would similarly be subject to express SRLA rates.
Suno and Udio are AI‑music generators that license catalogues of recorded music to train their models. Both platforms have entered into licensing agreements with UMG and WMG, respectively. In November 2025, WMG settled a copyright infringement case with Suno and announced a licensing deal that would allow the platform to launch licensed AI models in 2026. WMG also settled a lawsuit with Udio and entered into a similar licensing arrangement. Despite these settlements, the AFM’s complaint remains focused on the fact that the labels are using the same catalogues to train AI models without compensating the musicians whose recordings were used.
UMG’s letter to the court emphasized that Article 21(a) requires payment only when another AFM agreement already governs the new use and supplies a negotiated rate. The label added that even if the clause covered AI licensing, it supplies no rate, formula, or external benchmark, rendering the obligation too indefinite to enforce. WMG’s motion to dismiss follows a similar line of reasoning, arguing that the clause does not create a royalty for non‑covered uses.
The AFM’s filing urges the court to allow discovery to proceed, arguing that the dismissal motions would prematurely bar the union from obtaining evidence that could demonstrate the existence of a royalty obligation. The union also requests that the judge treat Article 21(a) as requiring a freestanding royalty for any use not covered by another agreement, rather than limiting it to situations where a rate has already been established.
The case has broader implications for the music industry’s approach to AI. As AI‑generated music becomes more prevalent on streaming services and in other media, the question of how existing labor agreements apply to new technologies remains unsettled. The outcome could set a precedent for how record labels negotiate AI‑training licenses and how unions protect their members’ rights in a rapidly evolving digital landscape.
At present, the presiding judge has not issued a ruling on the dismissal motions. The AFM’s latest filing, posted to the docket on July 21, includes a request for discovery and a statement that the union believes the court should not dismiss the case. The legal dispute continues to unfold as the parties prepare for the next stage of litigation.
In summary, the AFM is pressing for a court decision that recognizes AI‑generated music as a new use under Article 21(a) and requires UMG and WMG to pay royalties to its members. The labels, in turn, argue that the clause does not cover AI and that no royalty obligation exists. The case remains pending, with discovery and further motions expected in the coming weeks.
At the heart of the case is the question of what constitutes a “new use.” UMG and WMG, each represented by separate counsel, argue that Article 21(a) is a rate‑conversion provision that only applies when a negotiated rate already exists in another AFM agreement. They maintain that the clause does not grant a royalty for uses that lack a pre‑existing rate and that it offers no formula or benchmark for determining payment in an AI context. In early July, the labels submitted letters to the court supporting motions to dismiss, insisting that the clause’s language is limited to situations where a rate has already been established.
The AFM counters that Article 21(a) is ambiguous and can be interpreted to cover new uses that lack a pre‑existing rate. The union cites historical precedent: when music first entered the video‑game market, no AFM agreement had set a rate for that medium, yet the industry treated it as a new use for notification and payment purposes. The AFM also points to the Sound Recording Labor Agreement (SRLA), which sets rates for streaming services. It argues that an AI‑generated recording distributed on a streaming platform would fall under the SRLA’s rates, and that other AI uses—such as video‑game soundtracks, sampling, and commercial placements—would similarly be subject to express SRLA rates.
Suno and Udio are AI‑music generators that license catalogues of recorded music to train their models. Both platforms have entered into licensing agreements with UMG and WMG, respectively. In November 2025, WMG settled a copyright infringement case with Suno and announced a licensing deal that would allow the platform to launch licensed AI models in 2026. WMG also settled a lawsuit with Udio and entered into a similar licensing arrangement. Despite these settlements, the AFM’s complaint remains focused on the fact that the labels are using the same catalogues to train AI models without compensating the musicians whose recordings were used.
UMG’s letter to the court emphasized that Article 21(a) requires payment only when another AFM agreement already governs the new use and supplies a negotiated rate. The label added that even if the clause covered AI licensing, it supplies no rate, formula, or external benchmark, rendering the obligation too indefinite to enforce. WMG’s motion to dismiss follows a similar line of reasoning, arguing that the clause does not create a royalty for non‑covered uses.
The AFM’s filing urges the court to allow discovery to proceed, arguing that the dismissal motions would prematurely bar the union from obtaining evidence that could demonstrate the existence of a royalty obligation. The union also requests that the judge treat Article 21(a) as requiring a freestanding royalty for any use not covered by another agreement, rather than limiting it to situations where a rate has already been established.
The case has broader implications for the music industry’s approach to AI. As AI‑generated music becomes more prevalent on streaming services and in other media, the question of how existing labor agreements apply to new technologies remains unsettled. The outcome could set a precedent for how record labels negotiate AI‑training licenses and how unions protect their members’ rights in a rapidly evolving digital landscape.
At present, the presiding judge has not issued a ruling on the dismissal motions. The AFM’s latest filing, posted to the docket on July 21, includes a request for discovery and a statement that the union believes the court should not dismiss the case. The legal dispute continues to unfold as the parties prepare for the next stage of litigation.
In summary, the AFM is pressing for a court decision that recognizes AI‑generated music as a new use under Article 21(a) and requires UMG and WMG to pay royalties to its members. The labels, in turn, argue that the clause does not cover AI and that no royalty obligation exists. The case remains pending, with discovery and further motions expected in the coming weeks.
