The American Federation of Musicians (AFM) has asked a New York federal court to reject attempts by Universal Music Group and Warner Music Group to dismiss its lawsuit over their AI licensing deals with Suno and Udio. The union argues these deals trigger a "new use" clause in its collective bargaining agreement, which it says obliges the labels to pay musicians whose recordings were licensed to the AI firms, making this a significant test of how existing union contracts apply to generative AI music deals.

In a filing on 17 July, the AFM told Judge Edgardo Ramos that Article 21(a) of the Sound Recording Labor Agreement is "ambiguous" and imposes a mandatory payment obligation regardless of whether a specific AI rate has been set elsewhere, citing past precedent with video game licensing. Universal and Warner, in earlier letters filed on 7 and 10 July respectively, argued the clause only converts existing rates rather than creating new royalty entitlements, with Warner accusing the union of trying to influence negotiations through litigation. Both majors also sought to pause evidence discovery pending their dismissal bids, a request the AFM has opposed; the union separately said it would amend its complaint to name Warner Records, Inc. rather than Warner Music Group Corp. as defendant.