AI Clauses Are the New 360 Deals

Jimmy Hession saw it first.

Hession, an artist manager at Milk & Honey, was negotiating a producer agreement with Sony-owned B1 Recordings for his client Paul Harris this March. Sony Music Germany sent over the terms. Buried in the language: "unlimited, exclusive rights" for the label to use the recording in generative AI models and systems, including AI training on patterns, trends, and correlations in the recording itself. Billboard reported the exact wording on April 21.

Hession pushed back. He won approval rights. But those approval rights don't extend to any "blanket license" Sony signs granting another party access to "all or a significant portion" of its catalog. The escape hatch is still open.

That's one deal. Billboard reported on April 21 that near-identical language showed up in another B1 artist agreement in November. Believe added a provision to an October 2025 distribution contract allowing AI training on catalog. BMG wrote an "AI Right" clause into a distribution deal that also bans the artist from delivering AI-assisted tracks, bans re-records (Swift-style), and grants BMG the right of adaptation including AI-based modifications.

This is the new 360 deal. Same pattern, different rights bundle.

What Actually Happened

Here is the contract evidence in one view.

• Sony / B1 Recordings (DE), Producer agreement, Mar 2026. "Unlimited, exclusive rights" for AI models, systems, and training. Artist negotiated partial approval rights.
• Sony / B1 Recordings (DE), Single agreement, Nov 2025. Near-identical training language. Signed as template, no pushback reported.
• Believe (FR), Distribution contract, Oct 2025. License content to "research, train, develop, test gen AI models." Artist accepted opt-in framework per Believe statement.
• BMG (DE), Distribution deal. "AI Right" to feed catalog into AI as training/validation/test data; bans AI-delivered tracks; bans AI re-records; grants AI adaptation right. Current standard for new BMG signings.

Two things matter here.

The first is that this is coming out of Germany and France, where the law forces labels to spell out every right they want. US and UK contracts hide the same rights inside broad, nonspecific grants. Colin Morrissey, an artist lawyer at Granderson Des Rochers, told Billboard that explicit AI training grants are still rare in major-label US deals. Audrey Benoualid at Myman Greenspan and Jason Boyarski at Boyarski Fritz both flagged the same structural gap: the existing blanket license provisions in standard US record deals are broad enough that labels, per Boyarski, "technically don't need special approvals to train."

In plain English: if a US record deal has a standard blanket license clause, the label may already have the right to opt the artist into an AI training deal without asking.

The second thing that matters: this coincides with the settlement wave. Warner and UMG settled with Udio last fall and signed licensing deals. Kobalt and Merlin followed. Warner settled with Suno in December. Sony is still in active litigation. The contracts and the settlements are the same strategy seen from two angles. License the upstream pipe from artists, then license the downstream pipe to Suno and Udio, take a cut on both sides.

Why It Matters for Operators

Here is the operator math.

The 2000s version was touring. CD revenue collapsed, so Sony and EMI rewrote recording contracts to capture touring, merch, publishing, endorsements, and sponsorships. The justification was that the label was carrying more risk in a shrinking business. The artists most exposed were the ones without attorneys in the room. Most of them were new signees and international acts outside the US/UK legal hubs.

The 2026 version is AI training. Streaming revenue is flat per stream. Catalog acquisition multiples keep rising. Labels need a new revenue line, and AI training licenses are the obvious one. Universal Music Group's AI training catalog is a bigger upside than any touring clause Sony ever wrote, because the catalog is the product, and AI is the buyer.

The asymmetry is worse than it was in 2006. Back then the artist at least understood that touring was a revenue stream being negotiated. Today, an artist reading "grant the right to exploit the master in all media now known or hereafter devised" probably doesn't see AI training inside that clause. The attorney sees it. Most indie artists don't. And most indie artists in the 2000s didn't have the attorney.

In consulting engagements with boutique labels, this pattern is exactly why boutique distribution still exists. Artists who don't sign their master rights to a major don't walk into rooms where the AI training clause is buried under a blanket license. When a Sony or a BMG comes in later with a catalog-licensing offer, the boutique-side artists are the counterparty, not the collateral.

Labels that lived through the 2000s watched deals get renegotiated every time a new revenue line opened up: 360s, YouTube monetization, then TikTok licensing, then superfan tiers. Each one was a specific clause fight that mattered more than the headline advance. AI training is the next one. It's already in deals being signed this month.

The Bigger Pattern

Three signals, same direction.

Deezer is pulling 75,000 fully-AI-generated tracks a day out of recommendations. That is 44% of all new uploads. Up 650% from January 2025. Deezer's CEO Alexis Lanternier frames it as "transparency, removing fraud, fair remuneration." Detection is licensed to Sacem in France and EJI internationally. The cleanest DSP is also the only profitable one (EUR 8.5 million net on EUR 534 million revenue, first annual profit in company history).

Suno shipped v5.5 this month with consumer-grade vocal replication, on the back of a $250 million Series C at a $2.45 billion valuation. Voice cloning is now a shipped consumer feature, not a research demo.

And on April 19, Judge Alvin Hellerstein denied Udio's motion to dismiss the DMCA Section 1201 claim in the UMG v. Udio case. That is the first procedural win for plaintiffs on the "scraping-as-circumvention" theory. Discovery begins. Suno faces the same allegation.

Put it together. Courts are letting the scraping claim survive. Platforms are pricing clean catalog as profit and dirty catalog as a liability. Labels are writing AI training rights into new contracts. And AI companies are shipping voice replication at consumer scale.

The contract language is load-bearing in all four of these. The attorney with the red pen is now as important as the A&R rep.

One axis the 360 analogy does not map cleanly: the 360 deal fight was ultimately about an individual artist's commercial footprint. The AI clause fight is about an entire catalog's ability to train a model that replaces other artists. A 360 fight is about one artist's touring revenue. An AI clause fight is about whether that artist's voice can train a model that replaces them. The blast radius is bigger. An artist who loses a 360 fight still owns their vocal likeness. An artist who loses an AI clause fight may not.

What to Do About It

Five moves. This quarter.

1. Pull your current contracts and search three terms: blanket license, future technology, and AI. If any of those appear in broad grants without carve-outs, you have AI training exposure inside clauses written before the word AI was in deal language. This is the single highest-leverage audit in the music business right now. Your attorney should be able to turn it around in a week. If the audit surfaces a gap, renegotiate before your next deal cycle, not after.

2. Demand explicit AI language in every new deal from this point forward. Not blanket grants. Not "future technology." Name the use cases: training, input, output, voice replication, style mimicry, catalog licensing. Morrissey's approach at Granderson Des Rochers is the right one: assume the label already has rights and work backward to claw back approval on a use-case basis. Every clause you don't spell out is a clause the label gets for free.

3. Separate training rights from output rights in the contract. This is the distinction Benoualid flagged in Billboard. Labels and AI companies are using "opt-in" to refer to outputs (AI songs that come out) without being specific about inputs (catalog going into training). Those are two different grants. Price them separately. Approve them separately.

4. If you run a label, figure out your AI training position before your next signing. You are about to sign artists whose catalog value, measured in training datasets, is higher than their streaming value for the next five years. If you do not know what rate a training license clears at in your genre, you are the one with the information gap. Boutique labels working Regional Mexican, corridos tumbados, and banda have a specific advantage here: genre-coherent catalogs are more valuable training sets than general-pool catalogs. Price accordingly.

5. Build the verification layer into the signing process. Every new artist deal should come with verified human authorship documentation. The contract version is an artist rep-and-warranty that "delivered masters are human-authored and not AI-generated" and that any AI tools used in the production are disclosed in advance. BMG is already writing this into distribution deals. You should be too.

The Bottom Line

The 360 deal fight took a decade to settle. By the time indie attorneys had template carve-outs for merch and touring, the industry standard had already shifted. The artists signed in 2007 and 2008 paid for the artists signed in 2015 to get better terms.

The AI clause fight will be faster. The contract language is already out in the open. Billboard just published the exact wording. Every attorney in the business is now on notice.

The ones pushing back first get carve-outs. The ones signing the template get the template.

Boutique distribution sidesteps the whole fight. Artists who don't assign their masters to a major don't have the blanket license problem. When a Suno or a Udio signs a catalog-training deal with UMG in 2027, the artists who control their own masters are the counterparty, not the line item.

The contract is the product now. Everyone in the pipe should be reading it like one.

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Music AI Partners works with labels, distributors, and publishers on AI workflow integration, catalog intelligence, and platform strategy. If a contract audit or AI position review is on your roadmap this quarter, get in touch or book a call.