NMPA Unveils AI Licensing Deals with Udio and Klay with 50/50 Split for Songs and Recordings

Key Takeaways

• NMPA deals give AI firms 50/50 split of song and recording royalties
• Udio secured licenses with Universal, Warner, Sony and indie publishers
• Klay obtained pre‑launch licenses from all three major labels
• Deal parity addresses long‑standing songwriter complaints about streaming revenue splits
• Future AI licensing will need coordination with collecting societies worldwide

Pulse Analysis

Artificial intelligence is rapidly entering music creation, but the legal framework for using copyrighted works has lagged behind. The National Music Publishers Association stepped in to provide a template that forces AI platforms to compensate both songwriters and owners of sound recordings equally. By insisting on a 50/50 revenue split, the NMPA not only addresses the historic disparity where recordings earn three times more than compositions, but also creates a predictable licensing model that can be replicated across the industry.

Udio’s journey illustrates the transition from a fair‑use stance to a fully licensed operation. After facing pressure from major labels, the platform now holds agreements covering Universal, Warner, Sony, and a host of independent publishers, ensuring that every piece of music it trains on is cleared on both publishing and master fronts. Klay, by contrast, entered the market with pre‑launch licenses from the three majors, positioning itself as a compliant pioneer. For indie publishers, these template deals provide a concrete reference point and a pathway to monetize their catalogs without negotiating bespoke contracts for each AI service.

The broader implication is a potential industry standard for AI music licensing that could ripple worldwide. As AI models require not just U.S. rights but also mechanical and neighboring rights managed by collecting societies abroad, future agreements will need to bridge multiple jurisdictions. If the parity model proves financially viable, it may pressure streaming services and other digital platforms to revisit their own royalty structures, ultimately delivering more balanced compensation for creators across the music value chain.