UMG’s CEO Lays It All Out on AI Negotiations—Internal Memo

Photo Credit: The Recording Academy

Universal Music Group (UMG) Chairman & CEO Lucian Grainge has issued a lengthy internal memo obtained by Digital Music News. The memo outlines the label’s progress in forging agreements with AI companies—including lines drawn in the sand.

The communication was shared with Digital Music News by a staffer and reveals that UMG is in advanced discussions with ‘nearly a dozen’ companies. Those discussions involve licensing arrangements for generative AI products. The memo also cites recent partnerships with major platforms—including YouTube, TikTok, and Meta—as well as emerging players like BandLab, Soundlabs, ProRata, and KLAY.

The memo emphasizes that UMG will only entertain discussions with AI products trained responsibly and will not license to any model that uses an artists’ voice or existing music without their explicit consent. The company is also pursing agreements aimed at accurate attribution and fair compensation for artists, while combatting what Grainge refers to as ‘AI slop’ on streaming platforms—with Spotify’s recent AI slop removal called out as an example.

Grainge also warns that ‘large and powerful AI companies’ are lobbying governments to legitimize AI training on copyrighted works without consent or compensation. He states that these proposals are “nothing more than the unauthorized (and we believe illegal) exploitation of the rights and property of creative artists.” Grainge reaffirms that UMG is a proactive artist-centric label and will counter AI-generated platform pollution to protect its artists’ royalty streams.

Full Memo from Lucian Grainge to UMG Staff

Dear Colleagues,

I’m writing to update you on the substantial progress we’re making on our efforts to take advantage of the developing commercial opportunities presented by Gen AI technology for the benefit of all our artists and songwriters. 

There’s a lot to cover, but I want to address three specific topics:

• Responsible Gen AI company and product agreements;
• How our artists can participate; and
• What we’re doing to encourage responsible AI public policies.

Universal Music Group is playing a pioneering role in fostering AI’s enormous potential. While our progress is significant, the speed at which this technology is developing makes it important that you are all continually updated on our efforts and well-versed in the strategies and approaches at work.

The foundation of what we’re doing is the belief that, together, we can foster a healthy commercial AI ecosystem in which artists, songwriters, music companies, and technology companies can all flourish. That’s the framework and principles under which we’re operating.

New Agreements

To explore the varied opportunities and determine the best approaches, we have been working with AI developers to put their ideas to the test. In fact, we were the first company to enter into AI-related agreements with companies ranging from major platforms such as YouTube, TikTok, and Meta to emerging entrepreneurs such as BandLab, Soundlabs, and more. Both creatively and commercially, our portfolio of AI partnerships continues to expand responsibly and at breakneck speed.

Very recently, Universal Music Japan announced an agreement with KDDI, a leading Japanese telecommunications company, to develop new music experiences for fans and artists using Gen AI. We are also very actively engaged with nearly a dozen different companies on significant new products and service plans that hold promise for a dramatic expansion of the AI music landscape. 

Furthermore, we’re seeing other related advancements. While just scratching the surface of AI’s enormous potential, Spotify’s recent integration with ChatGPT offers a pathway to move fluidly from query and discovery to enjoyment of music—and all within a monetized ecosystem.

How UMG Artists Can Participate

Based on what we’ve done with our AI partners to date, and the new discussions that are underway, we can unequivocally say that AI has the potential to deliver creative tools that will enable us to connect our artists with their fans in new ways—and with advanced capability on a scale we’ve never encountered before.

Beyond this, I believe that Agentic AI, which dynamically employs complex reasoning and adaptation, has the potential to revolutionize how fans interact with and discover music. But we need to harness it in the right way.

I know that we will successfully navigate and seize these opportunities, and that these new products could constitute a significant source of new future revenue for artists and songwriters. We will be actively engaged in discussing all of these developments with the entire creative community.

While some of the biggest opportunities will require further exploration, we are excited by the compelling AI models we’re seeing emerge. We will only consider advancing AI products based on models that are trained responsibly. 

That is why we have entered into agreements with AI developers such as ProRata and KLAY, among others, and are in discussions with numerous additional like-minded companies whose products provide accurate attribution and tools which empower and compensate artists—products that both protect music and enhance its monetization.

And to be clear—and this is very important—we will NOT license any model that uses an artist’s voice or generates new songs which incorporate an artist’s existing songs without their consent.

New AI products will be joined by many other similar ones that will soon be coming to market, and we have established teams throughout UMG that will be working with artists and their representatives to bring these opportunities directly to them.

Responsible Public Policies Covering AI

We remain acutely aware of the fact that large and powerful AI companies are pressuring governments around the world to legitimize the training of AI technology on copyrighted material without owner consent or compensation, among other proposals.

To be clear: all these misguided proposals amount to nothing more than the unauthorized (and, we believe, illegal) exploitation of the rights and property of creative artists.

In addition, we are acting in the marketplace to see our partners embrace responsible and ethical AI policies, and we’re proud of the progress being made there. For example, having accurately predicted the rapid rise of AI “slop” on streaming platforms, in 2023 we introduced Artist-Centric principles to combat what is essentially platform pollution. Since then, many of our platform partners have made significant progress in putting in place measures to address the diversion of royalties, infringement, and fraud—all to the benefit of the entire music ecosystem.

We commend our partners for taking action to address this urgent issue, consistent with our Artist-Centric approach. Further, we recently announced an agreement with SoundPatrol, a new company led by Stanford scientists that employs patented technology to protect artists’ work from unauthorized use in AI music generators.

We are confident that by displaying our willingness as a community to embrace those commercial AI models which value and enhance human artistry, we are demonstrating that market-based solutions promoting innovation are the answer.

We’re Leading the Way Forward

So, as we work to assure safeguards for artists, we will help lead the way forward, which is why we are exploring and finding innovative ways to use this revolutionary technology to create new commercial opportunities for artists and songwriters while simultaneously aiding and protecting human creativity.

I’m very excited about the products we’re seeing and what the future holds. I will update you all further on our progress.

Lucian