Universal Music Moves to Toss AFM’s Gen AI Suit, Says It’s Required to Pay the Union ‘Nothing’ for Its Udio Licensing Deal

Richmond, Virginia’s In Your Ear Studios. Photo Credit: Will Fisher

Two weeks after the American Federation of Musicians (AFM) fired off an amended suit against Warner Music and Universal Music, the latter major is doubling down on its dismissal push.

This latest dismissal demand surfaced in a newly submitted motion from Universal Music Group (UMG), though both defendants have been stressing the arguments therein for some time.

As many know, the AFM is adamant that the non-Sony majors’ Suno and Udio licensing pacts constitute a “new use” under the relevant labor agreement – meaning that the union musicians who contributed to the involved recordings are purportedly entitled to a piece of the pie.

In the opposite corner, UMG and Warner Music Group (WMG) haven’t hesitated to emphasize their shared belief that the “new use” provision doesn’t cover gen AI at all. The AFM’s refuted the possibility as well; the short version is that we have an ugly legal battle on our hands.

Against this backdrop, it’s safe to describe the major label defendants as eager to put said battle in the rearview.

The way UMG sees things, with the new use provision lacking a clear-cut price for utilizing recordings to train AI models, the AFM is due a grand total of $0 from the licensing tie-ups.

“The provision does not set the price,” UMG spelled out in its dismissal motion. “It says where the price lives: in the separate AFM agreement that governs the new use. If an album recording is licensed for use in a film, the AFM agreement governing film supplies the rate; the musicians are paid as if the recording had been made for the film in the first place.

“For the AI use alleged here—UMG’s licensing of sound recordings to the artificial-intelligence developer Udio for use in training AI models and generating outputs—AFM concedes no such agreement exists,” Universal Music proceeded. “A payment measured by an agreement that does not exist is no payment at all.”

With that, the provision “therefore required UMG to pay nothing, UMG breached nothing, and the claim fails on the face of the pleading,” according to the text.

There are, of course, other angles to each side’s position. But this is the majors’ central argument, and we’ve broken down their adjacent contentions in detail. (Chief among these contentions is that cutting the AFM in on AI licensing windfalls would be impossible in any event given the present absence of related formula and rate specifics.)

Now, all eyes are on the dismissal decision. Even if the suit is tossed, however, the AFM may still achieve a favorable outcome. The union is already negotiating a fresh labor agreement with the majors, and in WMG’s own words, “AI is the focus.”

Needless to say, the nonexistent Suno and Udio licensing compensation forwarded to AFM musicians thus far is factoring into the discussions. Meanwhile, the complaint is also part of “a global fight” for AI-related pay, the UK’s Musicians’ Union indicated in June.