The global music industry is entering a new phase of cooperation between major record labels and artificial intelligence companies. Sony Music Entertainment, Warner Music Group and Universal Music Group have each reached licensing agreements with Klay, an AI music startup that develops models trained exclusively on authorised audio. The deals come at a time when the industry is reassessing its approach to AI generated music after years of disputes over training data and intellectual property.
Klay has secured rights to use catalogues from the three major labels and their publishing divisions to build what it calls a Large Music Model intended for legitimate creative use. The company has positioned its platform as a subscription based service where users can generate music, create remixes and produce new compositions using licensed materials rather than unverified samples from the open internet. According to the company, the service is designed to respect artist rights while enabling experimentation in genres and styles that fans can explore through AI.
Label executives have indicated that the reason for supporting Klay is rooted in control and transparency. Representatives from the labels have emphasised that any AI model using their catalogues must operate within a framework that protects copyrights and ensures that songwriters and performers are fairly compensated. They have described the partnership as a way to promote creative possibilities for artists and producers while maintaining a responsible approach to AI development.
For the major labels, the agreements signal a strategic shift from legal action to structured licensing. Over the past two years, the industry has faced a growing number of unauthorised AI generated tracks that were made using voice models resembling well known artists. Some of these tracks attracted millions of views and raised concerns among labels regarding loss of control, dilution of artist identity and the potential misuse of copyrighted works without consent. The decision to work with companies that commit to licensed training is seen as a way to address these concerns more constructively.
Warner Music Group has also concluded a separate development in the AI music space by settling its copyright dispute with Udio, another AI music company. The settlement ends a long period of conflict over whether Udio’s earlier models used copyrighted songs without permission. Following the resolution, Warner and Udio have agreed to collaborate on a fully licensed AI music creation platform scheduled to launch in 2026.
The upcoming platform will allow users to remix, cover and create songs using voices and compositions from participating artists under strict guidelines. Warner has stressed that artists and songwriters will be credited and compensated whenever their work is used in the system. The company stated that its goals include unlocking new creative formats and new commercial models for artists while ensuring that the rights of creators remain central.
Industry observers view these moves as part of a broader shift in how major labels plan to coexist with generative AI. Market analysts have noted that the widespread use of AI tools among consumers and independent creators has made it difficult for the industry to rely solely on litigation. Many listeners cannot distinguish between human and AI generated songs, and the appearance of synthetic tracks has driven labels to seek licensing frameworks that preserve both artistic integrity and commercial value.
The partnerships also reflect a growing recognition that AI may play a significant role in fan engagement. Licensed platforms allow fans to interact with music in new ways, whether through customised remixes or personalised audio variations. Labels believe that controlled participation can help deepen loyalty while expanding revenue opportunities. At the same time, these platforms offer artists optional pathways to engage with AI technologies without compromising their brand or control.
For AI companies, securing deals with the three major labels represents an important milestone. It signals that the industry is willing to support companies that adopt ethical data practices and transparent training methodologies. Klay becomes one of the first AI music firms to gain access to catalogues from all major rights holders, positioning it strongly within the emerging market for authorised AI sound generation.
Despite the progress, several questions remain. Industry experts point to the need for clear rules on royalty distribution, especially as AI generated tracks become more complex and collaborative. There are also considerations around the extent to which artists will allow their voices or styles to be used by consumers. While labels support innovation, they continue to maintain boundaries around brand protection and artistic authenticity.
As the industry prepares for the launch of new licensed platforms in 2026, it is expected that more companies and independent labels may enter similar agreements. The coming phase is likely to test how well the music ecosystem can balance creativity, commercial opportunity and rights protection in an environment increasingly influenced by AI. The agreements signed by Sony, Warner and Universal represent a step toward establishing that balance and shaping how AI generated music will be produced and consumed in the years ahead.