Major Music Labels Strike Deals With New AI Streaming Service

The world’s largest music companies have licensed their works to a music startup called Klay, which is building a streaming service that will allow users to remake songs using artificial intelligence tools.

Klay is the first music AI service to reach a deal with all three major record labels, Universal Music Group NV, Sony Music and Warner Music Group Corp., according to people familiar with the deals. Klay plans to announce its agreements in the coming days, said the people, who asked not to be identified discussing confidential plans.

Klay is building a product that will offer the features of a streaming service like Spotify, amplified by AI technology that will let users remake songs in different styles. Klay has licensed the rights to thousands of hit songs so that it can train its large language model.

The company has positioned itself as a friend of the industry, offering assurances that the artists and labels will have some control over how their work is used. Klay is led by music producer Ary Attie and also employs former executives from Sony Music and Google’s DeepMind, an AI laboratory.

The music industry has been battling AI companies, alleging illegal use of their songs. The labels sued Suno Inc. and Udio for copyright infringement, claiming they illegally used their music to train their systems to spit out work that sounds similar.

Music companies know that artists are already using AI tools in producing new songs and are trying to embrace the technology while policing copyrights, which are their most valuable assets. The biggest services in music, including Spotify and YouTube, are also working on AI tools.

The record industry is now in the midst of a dealmaking spree when it comes to AI. Universal Music and Warner Music have both settled their suits against Udio and have licensed their work to the company for a forthcoming product. They have also done deals with Stability AI. None of the major labels has done a deal with Suno, the biggest player in the emerging area of AI music. The company was valued at $2.4 billion in its most recent fund raising.

Photo: Photographer: Brendon Thorne/Bloomberg