A music-generation newcomer emerged from stealth mode with licenses to train generative AI models on music controlled by the world’s biggest recording companies.
What’s new: Klay Vision, based in Los Angeles, became the first AI company to sign licensing agreements with all three major record labels — Sony Music Entertainment (SME), Universal Music Group (UMG), and Warner Music Group (WMG) — and the publishing companies that own the rights to the underlying compositions their recordings are based on. The agreements, whose financial terms are undisclosed, authorize Klay to train generative models on music whose copyrights are owned by those companies. The startup plans to launch a subscription streaming platform that enables listeners to customize existing music while compensating copyright owners, and it aims to cut similar deals with independent record labels, publishers, artists, and songwriters.
How it works: Unlike music generators that produce original music according to a text prompt, Klay’s system will allow users to alter existing recordings interactively, for instance, changing their mix or style, in a manner the company calls “active listening.”
- Klay is building a model trained on licensed recordings only. It provided no details about how the model was built or its capabilities. In addition, the company has developed an attribution system that identifies recordings that contribute to the model’s output, enabling it to compensate copyright owners.
- Payments likely will be dispensed on a per-stream basis. In recent negotiations between record labels, including UMG and WMG, and AI startups, including Klay, Suno, Udio, ElevenLabs, and Stability AI, the labels pushed for the sort of per-play compensation paid by streaming services rather than lump-sum licensing, Financial Times reported.
- Klay’s leadership team combines AI cred, record-industry savvy, and digital music distribution experience. It includes Björn Winckler, who contributed to DeepMind’s Lyria music generator; Thomas Hesse, formerly a president at SME; and Brian Whitman, who became a principal scientist at Spotify after that company acquired a music data startup he founded.
Behind the news: The partnership between Klay and the music-industry powers follows years of litigation in which copyright owners have sued AI companies over alleged copyright violations.
- Klay was founded in 2021 and “set out to earn the trust of artists and songwriters,” according to its CEO Ary Attie. In October 2024, UMG announced a “strategic collaboration” with Klay. Klay took the following year to build a licensing framework that would enable artists, record labels, and music publishers to control the use of their intellectual property by AI models and compensate them for music generated by models trained on their works.
- AI hit the mainstream music scene in 2023 as fans cloned the voices of artists including Drake and The Weeknd, Oasis, Eminem, and The Beach Boys to produce recordings of songs the singers themselves never sang. The experimental pop artist Grimes seized the moment to enable her fans to use her voice in their own productions.
- In 2024, the startups Suno and Udio launched services that offered text-to-music to anyone with a web browser. Their offerings created songs in virtually any style, complete with lyrics, based on prompts that described the desired song’s style, subject matter, and other attributes.
- Last year, SME, UMG, and WMG filed suits against Suno and Udio, startups that offer web-based music generators, for alleged infringement on their intellectual property.
- In summer 2025, a fake band called Velvet Sundown racked up more than 500,000 streams on Spotify. The uploader didn’t disclose that the music was generated, but online sleuths discovered the ruse based on artifacts typical of generated output.
- In mid-November, UMG and WMG settled with Udio, which agreed to disable downloads of generated music and build its own streaming service, and partnered with Stability AI to develop AI-powered tools for professional musicians, songwriters, and producers. This week, WMG settled with Suno, but SME’s and UMG’s lawsuits are ongoing.
Why it matters: The market for AI-generated music is still taking shape, but it has a promising future judging by events to date. Suno, for the time being, aims to build a market for generated music under the assumption that training AI systems on copyright-protected recordings is fair use, which will require a court decision or change in the law to confirm. Klay’s strategy contrasts sharply with that approach. Instead, Klay focused on obtaining licenses and compensating copyright owners, which gives it legal protection against claims of copyright infringement as well as goodwill and support from the music industry.
We’re thinking: The difference between music-generation pioneers and Klay echoes the situation circa 2000, when a startup called Napster gave to music fans the means to distribute music files, which it claimed was fair use. Apple launched iTunes in 2001 as an industry-friendly distribution service that provided a legitimate alternative. iTunes made it easier for listeners to play what they wanted to hear, it gave copyright owners revenue, and the industry welcomed it. Similarly, Klay aims to give the music industry a way to make money on generated music in a way that complements, rather than cannibalizes, its existing business.