American Federation of Musicians sues record labels over AI licensing

The American Federation of Musicians (AFM) has filed a federal lawsuit in the U.S. District Court for the Southern District of New York against major record labels, including Universal Music Group, Atlantic Recording Corp., and Warner Records. The union alleges these companies failed to compensate musicians or notify the AFM after licensing recording catalogs to artificial intelligence platforms Suno and Udio.

The lawsuit claims the labels breached the Sound Recording Labor Agreement (SRLA) by failing to trigger the ‘new use’ provision, which requires compensation when music is repurposed for new formats. AFM International President Tino Gagliardi stated that labels are securing massive payouts from AI deals without providing royalties to the artists whose work powers the technology.

In a recent development, the AFM voluntarily dismissed the action against Warner Music Group Corp. without prejudice. This dismissal follows arguments from the corporation that it was not the proper defendant, as it did not sign the specific labor agreement in question or license the AI platforms. The core legal dispute regarding whether AI training falls under ‘new use’ royalties remains active as parties continue negotiations for a new labor pact.