It’s happening. Warner Music Group has a licensing deal with Suno, ending its legal claims. Universal Music Group reached a settlement with Udio. After filing lawsuits and issuing warnings about the danger of generative AI, record labels are starting to do a 180.
This isn’t because they suddenly think AI is good for artists. It’s because they see AI as something they can control for their own benefit.
History is repeating itself
If you’ve been following the music industry long enough, you can see the pattern a mile away.
The last time tech disrupted everything, labels said no for years. Eventually, they realized listeners were embracing MP3s, then streaming years later. Once they saw how much money was sitting on the table, labels wanted in. They made deals where platforms like Spotify had to pay for the right to make songs available for streaming. In 2023, Spotify paid $9 billion dollars to labels and publishers.
Now we’re seeing a similar thing happen with these AI agreements. If AI companies want music to use for training data, they can pay a licensing fee.
The labels are basically saying: if you’re going to grow with our music, you’re going to do it through us.
Turning panic into a revenue model
The strategic part is honestly kind of wild. For months, the narrative was that AI was a nightmare waiting to happen.
Now it’s becoming another source of revenue. Training licenses. Usage licenses. Micropayments when AI-generated tracks are streamed.
This is how labels operate when they find a new market. They take the scary thing, wrap it in contracts, then convert it into something that can be forecast quarterly. The big sell is this is them protecting artists. That these deals are ethical. Yet everyone who works in music knows the real priority. Take control first, then twist the narrative.
Money and leverage
Money is a huge part of the story, but the pursuit of leverage is just as important. These deals give labels an advantage in shaping how AI will be incorporated into the industry. They get to define the safeguards. They set the licensing norms. They place themselves at the center of how music is accessed. Any AI company trying to build a product has to go through them.
The pro-artist messaging is mostly for show
Labels are going to paint these deals as them setting the foundation for a future that puts artists first.
When you look at who actually holds the power in these arrangements, it’s not the artists. It’s the labels deciding which AI companies get access. How much they pay. How an artist’s catalog can be used as training data. What counts as fair compensation.
The ones who benefit the most from these partnerships are the companies writing the contracts. The artists whose voices, styles, and catalogs are being absorbed into training data.
Labels don’t fear AI replacing artists
Artists are afraid of being replaced by AI. Labels aren’t.
If AI-generated music is good enough to compete with human artists, labels will still get paid as long as the training data is licensed. If AI produces tracks that chart well and get plenty of streams, it’s still a business opportunity.
Artists can rage against AI all they want. Labels only care about their bottom line. They’re not here to protect the artistry. They are here to protect the catalogs. As long as they can profit from AI, everything is coming up roses for them.
More deals are coming. When one major label settles, the rest will follow. AI companies want a seat at the table. Labels want control. The two sides can meet in the middle if the right payment structures are in place.The future isn’t going to be about banning AI or stopping it. It’s going to revolve around who makes the rules, and who profits from them.
