AI-generated music is flooding streaming services, creating a wave of AI singers and bands that don’t exist in real life.
Published November 20, 2025
The world’s biggest music label has signed an AI licensing deal with a little-known startup called Clay Vision, the companies said, the latest in a series of deals highlighting how technology is disrupting the music industry’s business model.
Warner Music Group, Universal Music Group, Sony Music Entertainment, and their publishing divisions have all signed separate deals with Clay, according to an announcement posted on Warner’s website Thursday.
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This comes a day after Warners signed two other artificial intelligence-related deals with startups Udio and Stability AI.
Few details have been released about the agreement or about Los Angeles-based Klay and its business.
The terms of the deal will help Cray “harness the potential of AI to further evolve the music experience for fans, while fully respecting the rights of artists, songwriters and rights holders,” the statement said. Cray worked with the music industry to license its “Framework for AI-driven Music Experiences” and built “large-scale music models” trained exclusively on licensed music.
AI-generated music is flooding streaming services amid the rise of chatbot-like song generators that instantly spit out new songs based on prompts entered by non-musical users. The synthetic music boom has also spawned a wave of AI singers and bands that have amassed millions of streams and climbed the charts despite not actually existing.
Last year, Warner, Universal and Sony sued Snow and Udio, the makers of two popular AI music generation tools, alleging that they exploited artists’ recordings without compensation. However, there are signs that the conflict is being resolved through negotiations.
Warner, which represents artists such as Ed Sheeran and Dua Lipa, announced on Wednesday that its copyright infringement lawsuit against Woodo has been resolved. The two companies announced they are collaborating to develop Udio’s licensed AI music creation service, scheduled to launch in 2026, that will allow users to remix songs by famous artists.
The company did not disclose financial details of the deal, which includes Warner’s recording and publishing operations, but said it would “create new revenue streams for artists and songwriters while their work remains protected.”
This is similar to the agreement that Universal Music Group signed with Eudio last month, which sparked a backlash after Eudio banned users from downloading songs it had created.
Udio said it will remain a “closed system” while preparing to launch the new service next year. If artists and songwriters choose to allow the use of their work, they will be credited and compensated when users remix or cover their songs, or create new songs with their own voices or compositions, the companies said.
Warner announced this week that it is working with Stability AI to develop “professional-grade tools” for musicians, songwriters and producers.
On Wall Street, Sony stock fell 2.3% in midday trading. Warner Music Group fell 2% and Universal Music Group fell 0.3%.
