The pivotal turn in this legal battle came from an admission recorded in court. At a pretrial conference on July 21, U.S. District Judge Edgardo Ramos asked the American Federation of Musicians' (AFM) attorney point-blank: does a corresponding agreement exist for AI use? AFM legal counsel Eyad Asad replied, "No, so there's no such underlying agreement in existence. We concede that." Universal Music Group's (UMG) attorneys have now written this exact admission into their motion to dismiss, calling it "the concession that ends this case."
AFM is locked in litigation with UMG and Warner Records over AI licensing. The union alleges that recordings featuring its musicians' performances and vocals were licensed to AI companies Suno and Udio without consent or compensation. At the heart of the dispute is the Sound Recording Labor Agreement (SRLA) between AFM and the labels—specifically its "new use" clause, which requires that if a label uses recordings in ways not anticipated or covered by the SRLA, it must compensate the musicians involved and notify the union. The problem: this clause was written in an era before AI music existed, and never explicitly mentions AI.
It's exactly this gap that UMG's legal team has seized on. In court filings, they wrote: "Article 21(a) does not itself set a rate—it borrows the rate from a separate AFM agreement governing new uses. And AFM has already conceded that no such agreement exists for AI use." According to documents cited by Music Business Worldwide, UMG went on to conclude: "A payment obligation measured by a nonexistent agreement is no payment obligation at all." In other words, the labels' position is that without an agreement to draw a rate from, the clause simply cannot apply—leaving AFM's lawsuit without a leg to stand on.
This lawsuit unfolds against a broader industry-wide battle over where AI music training data comes from. Last year, Warner joined forces with Sony Music Entertainment and UMG to sue Suno and Udio over infringement "on a shockingly massive scale," but Warner later settled, striking a new licensing deal with Suno. According to Pitchfork, the agreement allows opt-in artists and songwriters to receive fair compensation for AI use while retaining "full control" over their music, likeness, and copyright details. That same month, Germany's collecting society GEMA won an infringement suit against Suno, which had trained its AI models on tracks like Boney M's "Daddy Cool" and Lou Bega's "Mambo No. 5" without securing licenses or paying royalties—a ruling that also requires other AI companies to pay for future use of GEMA's catalog. Earlier this month, artists including Jason Isbell filed suit against Suno as well, alleging the software allows users to replicate artists' identities and musical styles without consent.
UMG and Warner's motion to dismiss now awaits the judge's ruling. There is currently no public timeline for how the case will proceed or whether it will move into the discovery phase.
