AFM Opposes Labels’ Bid to Dismiss AI Musician-Pay Case

Musicians could still press for a share of money from record-label AI licensing deals after the American Federation of Musicians opposed efforts to dismiss its lawsuit. The union argues that its labor contract can plausibly treat generative-AI licensing as a compensable new use of recordings.

The dispute is not over whether AI companies may use the labels’ catalogs. It asks whether musicians who performed on recordings later licensed to Suno and Udio are entitled to compensation from those arrangements. AFM alleges the labels licensed catalogs without compensating musicians or notifying the union.

One clause, two sharply different readings

At the center is Article 21(a) of the Sound Recording Labor Agreement, which addresses recordings used for purposes outside the agreement. AFM says the clause is ambiguous, and that its interpretation need only be plausible for the case to survive dismissal. Under the union’s reading, an AI use can create a payment duty even without a standalone agreement governing generative-AI platforms.

The rate question comes later, AFM says

The agreement has no precise formula for AI compensation. AFM nevertheless contends that uncertainty over the amount should not erase potential liability at this stage. It says existing session, streaming and sampling rates could help inform a calculation if its interpretation ultimately prevails.

What AFM says could guide a payment calculation

• Session rates in the existing labor agreement.
• Streaming rates already set under AFM agreements.
• Sampling rates that could inform compensation.

The licenses behind the lawsuit

According to AFM’s case summary, Warner Records and Atlantic Recording Corp. settled with both Suno and Udio, while Universal settled with Udio. The union filed the lawsuit in the Southern District of New York on June 5. A July filing corrected the Warner defendant’s name to Warner Records, the agreement’s signatory.

The court had not yet ruled on the dismissal dispute. Allowing the suit to continue would not establish that musicians are owed money; it would allow AFM to continue pursuing its reading of the agreement and the labels’ licensing obligations.