Universal Music Group Chairman and CEO Sir Lucian Grainge has issued a stark warning about “irresponsible business models” in AI music, declaring that UMG will not tolerate deals that “devalue artists” and “promote the exponential growth of AI slop on streaming platforms.”<\/p>\n
The comments appear in Grainge’s<\/strong> annual New Year memo to UMG staff, sent earlier today (January 8) and obtained by MBW<\/strong>, in which he celebrates a successful 2025 for the world’s biggest music rights company and its artists, while outlining strategic priorities for 2026.<\/p>\n “Validating business models that fail to respect artists’ work and creativity, and promote the exponential growth of AI slop on streaming platforms, is a grave disservice to artists, songwriters and all of us who work in music,” writes Grainge<\/strong>.<\/p>\n “Let me be clear: UMG will not stand by and watch irresponsible business models take hold, models that devalue artists, fail to provide adequate compensation for their work, stifle their creativity and ultimately, diminish their ability to reach fans.”<\/p>\n Notably, Grainge’s pointed language on this topic comes as UMG continues active litigation against AI music generator Suno, <\/strong>a company with which rival Warner Music Group<\/strong> settled<\/a> and struck a licensing deal in November 2025.<\/p>\n (Sony Music, Germany’s GEMA, and Denmark’s Koda are all also actively suing Suno.)<\/p>\n “LET ME BE CLEAR: UMG WILL NOT STAND BY AND WATCH IRRESPONSIBLE BUSINESS MODELS TAKE HOLD\u2014MODELS THAT DEVALUE ARTISTS, FAIL TO PROVIDE ADEQUATE COMPENSATION FOR THEIR WORK, STIFLE THEIR CREATIVITY AND ULTIMATELY, DIMINISH THEIR ABILITY TO REACH FANS.”<\/strong><\/p>\n SIR LUCIAN GRAINGE, UMG<\/span><\/p>\n<\/blockquote>\n In the memo, Grainge<\/strong> positions UMG’s own AI strategy between what he characterizes as two “equally flawed” extremes: those who believe there should be no engagement with AI, and those who think “we should acquiesce to accepting whatever AI models are released, regardless of their ethicality.”<\/p>\n “When it comes to new technology, we engage, adapt and innovate,” he writes, citing decades of technological change in the music industry, “from the player-piano to the phonogram to radio to vinyl, cassette, MP3, downloads, ad-funded streaming into premium subscription”.<\/p>\n “At the same time, that approach must be thoughtful, strategic, commercial and nuanced,” Grainge<\/strong> adds.<\/p>\n The memo follows UMG’s recent announcement<\/a> of a strategic partnership with AI computing giant NVIDIA<\/strong>, which Grainge<\/strong> describes as “first-of-its-kind” and aimed at fundamentally transforming “music discovery and fan engagement.”<\/p>\n Grainge<\/strong> notes that UMG became “the first media company to enter into AI-related agreements with established platforms such as YouTube, Meta, TikTok, and KDDI as well as with emerging AI entrepreneurs such as Udio, BandLab, Soundlabs, KLAY Vision, Splice<\/a> and Stability AI”<\/a> in 2025.<\/p>\n “With all of our agreements, we have simultaneously protected artists and songwriters and human creativity, spawned a new wave of creative innovation in music and developed new revenue streams and commercial opportunities,” he writes.<\/p>\n The memo emphasizes that UMG’s AI partnerships “place artists at the center of everything we do,” with NVIDIA quoted as saying the collaboration will proceed “responsibly, with safeguards that protect artists’ work, ensure attribution, and respect copyright.”<\/p>\n The memo also highlights progress on UMG’s Streaming 2.0<\/strong> <\/a>initiative, with deals implemented with Amazon, Spotify and YouTube in 2025, and more agreements expected in 2026.<\/p>\n Grainge<\/strong> credits the company’s Artist-Centric<\/strong> initiative, launched three years ago, with accurately predicting “the dramatic increase in the volume of irrelevant uploads, including the rise of AI ‘slop.'”<\/p>\n “This ability to see around corners enabled us to anticipate this trend and protect our artists and songwriters by preemptively placing provisions in our agreements with DSPs that prevent AI slop from being counted in the same royalty pools as our artists and songwriters,” he writes.<\/p>\n Grainge<\/strong> confirms that these initiatives delivered on commitments outlined at UMG’s Capital Markets Day<\/a> in September 2024, demonstrating the company’s “capability to effectively develop, harness and adapt strategies to the benefit of the entire music ecosystem.”<\/p>\n Looking ahead, Grainge<\/strong> outlines several strategic priorities for 2026.<\/p>\n Superfans and retail expansion:<\/strong> A key focus will be serving superfans through “enhanced premium tiers” with DSP partners and emerging platforms focused on “special events and products for superfans, both virtually and in the physical world.”<\/p>\n “<\/em>In 2026 we will accelerate these efforts both by working with our established DSP partners on the launch of enhanced premium tiers for superfans, as well as by working with emerging platforms that are focused on special events and products for superfans, both virtually and in the physical world,” writes Grainge.<\/p>\n He also notes that UMG has “recently established a portfolio of retail stores in Tokyo<\/a>, Madrid<\/a>, New York and London<\/a> as a complement to our growing D2C business.”<\/p>\n The company plans to scale this activity in 2026, “including the expansion of our experiential hospitality strategy and seamless integrations between virtual and IRL events for superfans.”<\/p>\n Independent services:<\/strong> A section of the memo is dedicated to services for independent labels.<\/span>\u00a0“It’s no secret that much of our company’s success is powered by our entrepreneurial culture and decentralized structure, so identifying and partnering with like-minded leaders and entrepreneurs will only help ensure our continued future success,” Grainge writes.<\/p>\n The memo also references the “anticipated closing” of UMG’s proposed $775 million acquisition of Downtown Music, which is currently being assessed<\/a> by the European Commission. (UMG has proposed divesting Downtown\u2019s Curve royalty accounting business to address EC concerns over the deal. The EC has until February 27 to make a decision).<\/span><\/p>\n “With the anticipated closing of our acquisition of Downtown Music, and by continuing to broaden our independent partner portfolio, we want to accelerate our efforts in providing best-in-class services to both independent entrepreneurs and labels,” says Grainge.<\/p>\n\n
AI PARTNERSHIPS AND NVIDIA ALLIANCE<\/h6>\n
STREAMING 2.0 AND ARTIST-CENTRIC<\/h6>\n
2026 PRIORITIES: SUPERFANS, DOWNTOWN, GLOBAL EXPANSION<\/h6>\n