Musicians' union opposes Universal, Warner and Atlantic dismissal bid in AI licensing case

The union's opposition

The American Federation of Musicians filed its opposition in a New York federal court on 4 September, answering dismissal motions by Universal Music Group, Warner Records and Atlantic Recording Corp.

The union says the labels' AI deals let recordings made by its members be "fed into AI systems for commercial exploitation" without payment.

The case turns on Article 21(a) of the Sound Recording Labor Agreement, the union's collective bargaining agreement with the record companies. Article 21(a) covers what the contract calls a new use of a recording, meaning a purpose the agreement does not otherwise cover.

The AFM sued on 5 June and filed an amended complaint on 24 July. It alleges that the companies breached the SRLA by licensing members' recordings to AI music companies without paying or crediting them. Universal licensed recordings to Udio; Warner licensed to both Udio and Suno. Universal asked the court to dismiss the case on 5 August. Warner Records and Atlantic followed on 14 August.

The labels' dismissal argument

Universal Music Group's motion argues that Article 21(a) sets no rate of its own. It imports one from whichever separate AFM agreement governs the new use, the company says.

No such agreement covers AI use, Universal argues, so no payment is owed. The motion uses a film analogy: if an album recording is licensed for a film, the AFM agreement governing film supplies the rate. For AI use, Universal says, no such agreement exists. "A payment measured by an agreement that does not exist is no payment at all," the company's lawyers wrote. The motion says the provision "therefore required UMG to pay nothing, UMG breached nothing, and the claim fails on the face of the pleading".

Warner Music Group, the parent company, told the court in July that the AFM brought the lawsuit "in an improper attempt to place a judicial thumb on the negotiation scales". Warner Records and Atlantic were substituted for the parent in the amended complaint filed on 24 July.

In a statement to Music Business Worldwide, a Universal Music Group spokesperson said the company has been "at the forefront of protecting the rights and advancing the interests of artists and songwriters in the age of AI". The spokesperson said the AFM chose litigation during collective bargaining.

What the union argues

The AFM says Article 21(a) is "reasonably susceptible to more than one interpretation". It wrote that it "does not ask the Court to rewrite the SRLA or supply terms the parties did not agree to".

The union also argues that the SRLA's sampling provisions supply a rate for part of the conduct at issue, because they cover encoding part of a recording into a computer for playback in another song. Even under the labels' reading, the AFM wrote, "the sampling provisions provide an existing contractual payment reference; at minimum, they make dismissal premature."

The union further argues that Udio's AI outputs may end up in uses the SRLA already covers, such as streaming or film, which would carry existing rates.

At a 21 July conference, AFM lawyer Eyad Asad told US District Judge Edgardo Ramos there was "no rate in the Collective Bargaining Agreement for AI use" and "no underlying agreement for AI use". He added: "We conceded that". Universal's lawyers seized on that answer: "That concession ends this case".

Judge Ramos pressed the labels on the point, asking why they should not pay the authors of the music. He said Universal does not argue the musicians "are not entitled to anything". Instead, he said, the agreement requires the company to "sit down with AFM or the artists and determine to what extent they are going to benefit from that new use". Universal's lead counsel, Orin Snyder, replied: "Exactly".

The union also points to the copyright complaints that Universal, Warner and other labels filed against Udio and Suno on 24 June 2024. Those complaints said AI companies were "replacing the work of human artists with massive quantities of AI created sounds" that "substantially dilute the royalty pools paid out to artists". The AFM's brief says the labels' position is "especially untenable" given what they told the courts in June 2024.

The deals that triggered the lawsuit

Universal Music Group struck a settlement and licensing deal with Udio in October 2025. It has not settled with Suno.

Warner Music Group settled with Udio in November 2025 and days later became the first major to settle with Suno. The AFM alleges that AFM-represented musicians did not share in the settlement proceeds. The union also points to the labels' public statements on the settlements. Those statements presented the deals as proof of a "commitment to do what's right by our artists and songwriters" and "a victory for the creative community". Payout terms and participation numbers for the AI licensing deals have not been publicly disclosed.

What happens next

The AFM is already negotiating a fresh labor agreement with the majors. Warner Music Group says "AI is the focus" in those talks. The case is American Federation of Musicians v. Universal Music Group and Warner Records in the US District Court for the Southern District of New York.