Musicians have been left out of settlements between major record labels and AI companies, a new lawsuit alleges.

The American Federation of Musicians of the United States and Canada (AFM), which has 70,000 members, said Universal Music Group and Warner Music Group “received significant compensation” from the AI companies for past copyright violations and licensed “substantial” portions of their music catalogs to them, but haven’t shared that with the musicians.

UMG and WMG sued AI companies Udio and Suno in 2024, accusing them of copyright infringement. Both companies settled with Udio last year. In November, WMG announced a partnership with Suno, but Universal Music Group’s lawsuit against Suno is pending.

“While the Defendants protected their own interests and created a significant source of new revenue with the retrospective settlements and prospective licenses, they have refused to compensate the musicians whose work — created with their own instruments and through their talent, creativity, and hard work — is fed into AI machines for profit,” AFM said in its lawsuit, filed in U.S. District Court in New York on Friday.

AFM said it believes the AI settlements fall under the “new use” provision of its collective bargaining agreements, which requires music companies to notify the union of new licenses for purposes not covered by the contract and to compensate musicians, whose work was used to train AI models.

UMG and WMG said in statements that they are in negotiations on a collective bargaining agreement with AFM.

“Warner Music Group is growing the value of music by establishing guardrails and architecting a healthy AI ecosystem on behalf of artists everywhere,” the company said in a statement.

Universal Music Group said it will continue to work to resolve issues during the negotiations.

“Universal Music Group has been at the forefront of protecting the rights and advancing the interests of artists and songwriters in the age of AI — striking responsible AI licensing agreements to ensure they are compensated, leading the charge for legislation to further protect them and taking legal action against bad actors,” the company said in a statement.
“We expect to continue our strong working relationship with the AFM built on mutual respect for the talented musicians in our industry.”

AI has become more popular among consumers, dramatically changing the landscape in the entertainment industry. Many startups have popped up allowing users to type text prompts into AI systems to generate original songs, video clips and stories.

Some creatives say the AI tools help them brainstorm or illustrate bold ideas on a budget. But critics have raised concerns about whether AI systems are trained on copyrighted works without permission or payment to artists. Others are worried AI could eliminate their livelihoods.

Udio said it would create a new platform that would train on licensed and authorized music with artists having the ability to opt-in. Suno agreed to change its platform, launching new licensed models, and place download restrictions.

Bradford Auerbach, a partner at law firm OGC, said he expects to see more of these types of lawsuits filed by unions.

“You’ve got the unions always protecting the status quo, so you’ve got this invariable conflict of new technology coming in, and moving the cheese for a lot of people that were accustomed to having their business set up the way it was,” Auerbach said.