# AFM AI licensing lawsuit and industry shift to licensing

> Live situation record from CLSTR: https://clstr.news/situations/afm-ai-licensing-lawsuit-against-major-labels
> Updated: 2026-08-26T19:32:40.000Z. Sources: 5. Developments: 4.

In early August 2026, Universal Music Group (UMG) filed a motion to dismiss the AFM claim, reiterating that the Sound Recording Labor Agreement (SRLA) does not encompass AI licensing and seeking dismissal under Rule 12(b)(6).

By late August, the landscape shifted as UMG transitioned from legal disputes toward a licensing-based business model. Following a settlement with the AI music platform Udio, UMG and Udio reached an agreement covering both musical recordings and publishing. As part of this settlement, Udio is expected to launch a subscription-based platform in 2026 featuring fingerprinting and filtering tools to maintain a protected, licensed environment.

Other industry players, including Warner Music and Merlin, have joined similar licensing movements, though Sony Music has not yet participated in these specific deals. Additionally, UMG has expanded its influence through its joint venture, Liquidax Capital, which established Music IP Holdings (MIH) in Nashville. MIH focuses on licensing patents related to AI music and, as of August 2026, claims to hold over twenty active patents with approximately fifty more under examination.

## Timeline

### 2026-08-26: Universal Music Group pivots from AI lawsuits to licensing empire

Universal Music Group has shifted from suing AI firms to securing licensing deals, notably settling with Udio and building a patent-focused entity, Music IP Holdings, to manage AI music intellectual property.

2 sources. https://clstr.news/cluster/universal-music-group-pivots-from-ai-lawsuits-to-licensing-empire

### 2026-08-06: Universal Music Group files lawsuits over AI licensing and illegal streaming app

Universal Music Group seeks dismissal of an AFM AI‑licensing lawsuit in the U.S. and, with Sony Music, sues the Musi streaming app in Canada for copyright infringement.

3 sources. https://clstr.news/cluster/universal-music-group-files-lawsuits-over-ai-licensing-and-illegal-streaming-app

### 2026-07-21: American Federation of Musicians fights AI licensing lawsuit against Universal and Warner

The American Federation of Musicians sued Universal and Warner over AI licensing deals, urging a US court to reject the labels’ bid to dismiss, citing the union’s “new use” provision in Article 21(a).

2 sources. https://clstr.news/cluster/american-federation-of-musicians-fights-ai-licensing-lawsuit-against-universal-and-warner

### 2026-07-13: Warner Music seeks dismissal of AFM AI licensing lawsuit

Warner Music asks a New York court to dismiss the AFM lawsuit over AI licensing with Suno and Udio, arguing the SRLA doesn’t cover AI and the suit aims to pressure negotiations.

2 sources. https://clstr.news/cluster/warner-music-seeks-dismissal-of-afm-ai-licensing-lawsuit

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Cite as: AFM AI licensing lawsuit and industry shift to licensing. CLSTR, https://clstr.news/situations/afm-ai-licensing-lawsuit-against-major-labels