The labels settled with AI generators and kept the money. Now the musicians are suing.

What did the labels actually do with the settlement money?

When Universal Music Group and Warner Music Group sued AI music generators Suno and Udio for copyright infringement, they were protecting a genuine interest: the labels own the master recordings, and those recordings were used, without any license, to train the AI models. The labels won undisclosed settlements. UMG settled with Udio in late October 2025. WMG followed with Udio in mid-November 2025, then settled with Suno weeks after that, reportedly acquiring Suno's Songkick ticketing platform as part of the deal.

The problem, as the American Federation of Musicians sees it, is that the labels stopped there. They took the money and paid out nothing to the session musicians and performers whose recorded performances are the actual raw material those AI systems were trained on.

What is Article 21 and why does it matter here?

The AFM lawsuit, filed June 5, 2026, in the Southern District of New York, rests on a specific clause in the Sound Recording Labor Agreement: Article 21, known as the "new use" clause. Originally written to cover home video releases and compilation albums, the clause requires labels to compensate session musicians when their recordings are exploited in new commercial contexts beyond the original recording session.

The AFM's argument is direct. The labels licensed their catalogs to AI companies for training data. That is a new commercial use of the underlying recordings. The musicians who performed on those recordings are contractually entitled to a share of whatever the labels received for that new use.

"While the Defendants protected their own interests and created a significant source of new revenue, they have refused to compensate the musicians whose work is fed into AI machines for profit."

The quoted language from the complaint captures the core grievance: the labels acted as both owner and sole beneficiary of an asset that session musicians helped build, recording by recording.

Why is this lawsuit different from every other AI copyright case?

Most AI music litigation has focused on whether AI companies infringed copyright when they trained on recordings without a license. That question is effectively settled for UMG and WMG: both secured compensation through confidential settlements. This lawsuit does not relitigate that question. It asks what happens to the workers after the owners cash out.

The AFM, led by International President Tino Gagliardi and International Secretary-Treasurer Ken Shirk, with attorney Eyad Asad of Cohen, Weiss and Simon, is bringing what amounts to a labor claim inside a copyright outcome. Sony Music, which has not settled with Suno or Udio, is not named as a defendant.

If the AFM prevails, it sets a precedent that every future AI settlement involving major labels will require a worker compensation calculation alongside the headline number. That changes the economics of every deal in this space.