AI Music Deals: What Producers Need to Know

In November 2025, all three major labels — Universal Music Group, Sony Music, and Warner Music Group — signed licensing deals with the same AI startup: Klay, a company building a streaming service that lets users remake songs in different styles using AI. Weeks earlier, Warner and Universal had settled their copyright lawsuits against Udio, converting legal battles into licensing partnerships. Warner struck a similar deal with Suno.

In a few months, the music industry went from suing AI companies to signing deals with them. The same technology that major labels called "mass-scale copyright infringement" in 2024 became a licensed revenue stream in 2025.

But these deals were negotiated by the biggest players in the industry, for their catalogs, on their terms. If you're an independent producer, nobody negotiated on your behalf.

What the Major Label Deals Mean

The Klay Deal

Klay is building a streaming service that lets users take existing songs and regenerate them in different styles. To train its models, Klay licensed the catalogs of all three major labels.

• Opt-in for artists: Artists on major labels can decline to have their work included — but this only applies to artists signed to majors.
• Revenue sharing: Klay pays licensing fees to labels, who distribute royalties under existing contract terms. How much reaches the artist depends on their deal.
• Licensed training only: Models trained exclusively on authorized music — a direct response to the copyright lawsuits against companies that scraped unlicensed audio.

The Udio and Suno Settlements

In June 2024, the RIAA filed copyright infringement lawsuits against both Suno and Udio. By late 2025, those lawsuits converted into partnerships.

The two platforms are taking different paths. Udio is pivoting into a fan engagement and remixing platform — a "walled garden" where users can remix licensed music but creations can't leave the platform. No downloading, no uploading to DSPs.

Suno is keeping its core product — users can still generate tracks from text prompts — but current models will be deprecated and replaced with models trained on licensed music. Free-tier tracks will be restricted to non-commercial use, and tracks generated without an active subscription can't be monetized later.

What About Independent Artists?

Here's the critical gap. These deals protect artists signed to UMG, Sony, and Warner. Independent artists weren't at the negotiating table.

1

deal exists for independent artists

Udio struck a licensing deal with Merlin, the digital licensing collective representing thousands of independent labels. This deal is opt-in — Merlin members choose whether their catalogs are included. If you're distributed through a Merlin member (Secretly Group, Epitaph, Sub Pop, Domino, and many others), check with your distributor.

If you're fully independent — self-releasing through DistroKid, TuneCore, or CD Baby — you're currently outside these licensing frameworks. No one has licensed your music for AI training, and no one is paying you for it.

Can You Copyright AI-Generated Music?

This is the most important legal question for producers using AI tools.

The US Copyright Office's Position

In January 2025, the US Copyright Office clarified: AI-assisted works can be registered for copyright, but only when they embody "meaningful human authorship."

Copyrightable: You use AI to generate a melody, then substantially rearrange it, write lyrics, perform, and produce the final track. Your human contributions are copyrightable.

Not copyrightable: You type a prompt into Suno, download the output, and release it unchanged. The output is not eligible for copyright — it's effectively public domain.

Gray area: You use AI to generate stems, then heavily edit, layer, mix, and produce them. The more human creative decisions you make, the stronger your claim — but the Copyright Office evaluates case-by-case.

What This Means for Royalties

PROs (ASCAP, BMI, SESAC) only pay royalties to registered human songwriters and publishers. If your song is entirely AI-generated, it won't generate PRO royalties even if it accumulates streams.

The practical takeaway: use AI as a tool, not a replacement for your creative input. The more you shape AI outputs, the stronger both your copyright claim and your royalty eligibility.

For more on how royalties flow, see our guide on how music royalties work.

Protecting Your Voice and Likeness

Tennessee's ELVIS Act (2024) was the first US law specifically protecting against AI voice cloning. California has longstanding NIL+V protections. Federal legislation has been proposed but not yet passed.

Should You License Your Music for AI Training?

The Opportunity

New licensing frameworks let rights holders earn revenue from AI training without giving up ownership. Influence-based payout structures pay you each time your contribution influences an AI-generated output.

Current options for independents:

• Merlin's deal with Udio — available through Merlin-member labels/distributors
• Soundverse Content Partner Program — partial licensing with tiered rights, royalties triggered by usage
• Direct licensing with individual AI companies (typically through an entertainment attorney)

The Risks

• Unclear revenue potential. These are early-stage deals with no track record.
• Scope creep. "AI training" could mean anything from your production style to cloning your vocals. Get specific.
• No undo button. Once a model trains on your music, you can't untrain it.
• Market cannibalization. AI tools trained on your music could produce competing output.

How to Evaluate a Deal

1. What exactly are they licensing? Composition? Master? Voice? Production style?
2. Opt-in or opt-out? Industry advocates strongly favor opt-in.
3. How are royalties calculated? Per-use, revenue share, one-time, recurring?
4. Can you terminate? What happens to models already trained on your data?
5. Conflicts with existing deals? Check against your publishing, distribution, and sync agreements.

What You Should Do Right Now

1. Get your rights in order. AI training deals and copyright disputes both favor people with their paperwork sorted. Register with your PRO, the MLC, and the US Copyright Office. Document your splits and credits.

2. Know what you own. Do you own the masters? Are you a co-writer? Do your producer agreements include backend rights? Your leverage in any AI deal depends on the rights you hold.

3. Read every AI tool's terms of service. Some platforms claim rights to content you create using their tools, or use your inputs as training data.

4. Document your creative process. If you use AI tools, keep records of what AI generated versus what you changed. This supports your copyright claim.

5. Stay informed, don't panic. The immediate risks (voice cloning, unauthorized training) primarily affect well-known artists. The opportunity (AI training licensing revenue) is real but early-stage. The US Copyright Office's AI initiative and organizations like the Copyright Alliance publish regular updates.