Musicians Union Sues Major Labels for Artists Share of AI Song Generator Settlement Money

The American Federation of Musicians is suing major record companies Universal Music Group and Warner Music Group over the labels’ recent moves to settle their lawsuits with AI music generators Suno and Udio, arguing that the settlements’ benefits aren’t reaching the musicians themselves.

“While the Defendants protected their own interests and created a significant source of new revenue with the retrospective settlements and prospective licenses, they have refused to compensate the musicians whose work – created with their own instruments and through their talent, creativity, and hard work – is fed into AI machines for profit,” the AFM said in the complaint filed in federal court on Friday.

The AFM’s lawsuit comes months after UMG and WMG reached settlements with Udio and Suno last fall. UMG, the world’s largest music company, struck the first deal, announcing a settlement and partnership with Udio in late October of 2025. WMG came after, announcing a partnership of its own with Udio in mid-November. Weeks after that, WMG became the first (and so far the only) major label to settle with Suno.

The “big three” record companies, which includes Sony Music Group alongside UMG and WMG, first sued Suno and Udio in 2024, accusing that the AI music generators of massive copyright infringement by training their models on thousands of iconic songs without permission. Sony is the lone major music company that hasn’t settled with either AI company.

In settling with Suno and Udio, the AFM alleged that UMG and WMG “are allowing those same AI companies to use the work of AFM-represented musicians to do exactly what they warned about: Training AI models to generate supposedly ‘new’ sound recordings derived from music ingested into their models.”

The AFM further stated that with the settlements, UMG and WMG received significant compensation from the AI companies for past copyright violations, “licensed substantial portions of their music catalogs to the AI companies to train their models on both a retroactive and prospective basis, and will earn further revenue on an ongoing basis from the AI companies.”

Defendants have failed to share in the settlement proceeds and future revenue with those same artists whose music was copied, used for training, and incorporated into the development of the AI models and platforms now being commercially exploited as a new use of the performances embodied in those recordings, despite their self-congratulatory claims of protecting those same artists,” the AFM said.

“Warner Music Group is growing the value of music by establishing guardrails and architecting a healthy AI ecosystem on the behalf of artists everywhere,” a rep for WMG said in a statement. “We are disappointed by the AFM’s unproductive action amid our ongoing negotiations. We look forward to resuming our negotiations as scheduled.”

In a statement, a representative for UMG said the company “has been at the forefront of protecting the rights and advancing the interests ofartists and songwriters in the age of AI — striking responsible AI licensing agreements to ensure they are compensated, leading the charge for legislation to further protect them and taking legal action against bad actors.”

“The AFM chose this route during our collective bargaining negotiations, and we will continue to work to resolve any issues through these negotiations, as we have in the past,” the UMG representative said. “We expect to continue our strong working relationship with the AFM built on mutual respect for the talented musicians in our industry.”

AI music remains the hottest issue in the industry at the moment, as the business looks with caution on how to adopt AI while protecting its copyrights. One large looming question among stakeholders is how musicians themselves would actually get paid from their music being used to train the new songs. By the AFM’s assertion, that’s yet to happen at all.

While the likes of Suno and Udio are controversial in the business as songs have been used without permission and AI slop songs continue to flood streaming services, they’re growing more popular and are courting significant investment. Suno, the most prominent AI music platform in the business, announced earlier this week that it closed a $400 million funding round that valued the company at $5.4 billion.