Major Labels Move to Kill AFM's AI Royalty Lawsuit, and the Outcome Could Redraw Every Musician's Contract

If you are a session musician, the recordings you played on years ago are already generating money. Not for you. Your fiddle line, your horn section, your backing vocals are quietly training AI music models that spit out competing songs. And right now there is a courtroom fight over whether you are owed a single cent of that revenue.

The answer may arrive not from a jury but from a motion to dismiss, which means the whole question could be decided before anyone even gets to argue the facts.

Universal Music Group and Warner Records have asked a court to throw out the American Federation of Musicians' AI licensing lawsuit, according to NME. The AFM sued the two labels arguing that recordings performed by its members were licensed to AI companies Suno and Udio without the musicians being paid or even told.

The fight turns on a single phrase buried in the union's master contract: "new use."

What the contract actually says

The AFM's Sound Recording Labor Agreement includes a clause that kicks in when a label uses a recording in a way the original deal never anticipated. Under that clause, if a label finds a genuinely new way to exploit a recording, it owes the musicians on it, and it has to notify the union.

The AFM's position is straightforward. Feeding a recording into an AI training set is about as "new" a use as it gets. Nobody signed a session contract in 2005 imagining their performance would teach a machine to replace them.

The labels' counter is colder and, frankly, more clever. They are not arguing that AI training is an old use. They are arguing there is no price attached to it.

"Article 21(a) does not state a rate," UMG's lawyers wrote in the filing, as quoted by NME. "It imports one from the separate AFM agreement governing the new purpose. And AFM has conceded that no such agreement exists for the AI Use."

The concession that could end it all

Here is the pressure point. At a July 21 pre-motion conference, US District Judge Edgardo Ramos asked the union's counsel, Eyad Asad, whether a separate AFM agreement setting an AI rate exists. Per the transcript quoted in the labels' filing, Asad answered: "No. So, there is no underlying agreement for AI use. We conceded that."

UMG's lawyers pounced. "That concession ends this case," they wrote, per NME. "Discovery cannot change that fact, much less create the missing agreement. A payment obligation measured by an agreement that does not exist is no payment obligation at all."

Read that carefully, because it is the whole game. The labels are not saying musicians deserve nothing on the merits. They are saying the contract points to a rate schedule that was never written, and a payment obligation with no number is unenforceable. It is a technicality, but technicalities win motions to dismiss.

Why this is the highest-stakes procedural moment in years

Most of the AI music litigation has been about copyright. The majors have hammered Suno and Udio directly, and they are still doing it. Music Ally reported that UMG and Sony Music filed a fresh complaint against Suno over its v6 models, citing 60,202 sound recordings and calling the new models "the fruit of the same poisoned tree." We broke down that filing in our piece on the collapsing clean model.

But the AFM case is different, and that is what makes it dangerous. This is not the labels fighting AI companies. This is the labels fighting their own musicians. It is the first courtroom test of whether existing collective-bargaining agreements cover AI licensing revenue at all.

If UMG and Warner win this dismissal, tens of thousands of session players lose the one legal mechanism they have to claim a share of AI-training royalties their recordings already produced. The "new use" clause was the union's best tool. If a judge rules it does not reach AI, the tool breaks in every session musician's hands at once.

The uncomfortable subtext

Notice the timing. Warner already settled its copyright suit against Suno and signed a licensing deal. Pitchfork reported that deal promises artists and songwriters who opt in will be compensated fairly and keep control of their music and likeness. We covered how that opt-in structure is becoming a royalty signal for the whole business.

So the majors are building a licensed AI economy on one side while arguing, on the other, that the session players whose work seeded these models have no enforceable claim. Free money is free money, and the labels would rather collect it without a rate card that pays their musicians.

The AFM made a concession under questioning, and the labels are trying to make that one sentence load-bearing enough to end the case. Whether Judge Ramos lets a missing number wipe out an entire class of workers' claims will tell every musician in America exactly how much their old contract is worth in the AI era. Probably less than they hoped.

Sources

• NME
• Music Ally