NMPA signs the first industry-wide AI licensing deals with Udio and Klay, splitting income 50/50 between songs and recordings
The National Music Publishers’ Association announced industry-wide AI licensing deals with Udio and Klay at its 2026 Annual Meeting in New York on June 10. The template agreements let independent US publishers opt in to license their catalogs to either company, and both deals split AI licensing income 50/50 between songs and recordings.
For songwriters, the split is the headline. Streaming pays recordings more than 3 times what songs receive. These deals erase the gap for AI licensing income.
What the NMPA’s Udio and Klay template deals cover
The agreements work as model contracts. An independent publisher opts in and gets the negotiated terms, no individual legal fight required. NMPA president and CEO David Israelite told the meeting at Lincoln Center’s Alice Tully Hall the Udio agreement is “the first ever industry-wide licensing deal with a major AI music company,” per Complete Music Update.
The NMPA also put a number on its deal-making: agreements negotiated and settled in the past fiscal year, including the AI deals, distributed roughly $110 million to members, per Digital Music News. The same meeting put US publishing revenue at $7.3 billion for 2025, outgrowing recorded music for the fourth year running.
The first that will value songs and sound recordings equally when it comes to AI training.
Why the 50/50 split breaks from streaming economics
Recordings have dominated music’s money since streaming took over. The label side collects the lion’s share of every subscription dollar, and publishers have spent a decade arguing the song deserves more. Israelite says equal treatment is something the NMPA has “always demanded” in AI deals.
AI licensing resets the table because there is no legacy rate to defend. A model trains on the composition and the recording at the same time, so paying them equally has a logic streaming never offered. Every AI deal signed from here gets measured against this precedent.
Udio settled into licensing, Klay licensed first
The two companies arrived at the same table from opposite directions. Udio launched its generator without licenses, leaned on a fair use defense, and started signing deals under litigation pressure: Universal settled and co-built a licensed platform, Warner followed, and indie-side deals with Merlin and Kobalt came after. Sony’s case against Udio is still live.
Klay took the other path. The NMPA calls it one of the few companies to secure licenses before launching anything. Its Large Music Model is trained entirely on licensed music, it already holds deals with all 3 majors, and the NMPA agreement launches later this summer.
What indie publishers and songwriters should check before opting in
The template removes the biggest barrier for small publishers: negotiating alone against an AI company with venture lawyers. Opting in buys the NMPA’s terms and the 50/50 principle.
The open item is the money mechanics. How income flows from Udio’s subscription revenue to an individual opted-in catalog, and at what rates, is the detail to read before signing. The AFM lawsuit against Universal and Warner shows the downstream-payment question is where AI deals get contested.
Frequently asked questions
What are the NMPA's AI licensing deals with Udio and Klay?
They are template licensing agreements announced at the NMPA's 2026 Annual Meeting on June 10. Independent US music publishers can opt in to license their catalogs to Udio or Klay for AI training and platform use, instead of negotiating individual deals. NMPA chief David Israelite called the Udio deal the first industry-wide license with a major AI music company.
What does the 50/50 split in the NMPA's AI deals mean for songwriters?
AI licensing income gets divided equally between the song (writers and publishers) and the sound recording (artists and labels). Streaming pays recordings more than 3 times what songs receive, so equal treatment in AI licensing is a precedent songwriters and indie publishers have demanded since the first major-label AI deals.
What is Klay and how is it different from Udio?
Klay is an AI music company building what it calls a Large Music Model, trained entirely on licensed music. Unlike Udio, which launched unlicensed and signed deals after major-label litigation, Klay secured licenses from Sony Music, Universal Music, and Warner Music before launching its platform.
When does the NMPA's Klay licensing deal launch?
The NMPA says the Klay agreement will formally launch later in summer 2026. The Udio template agreement is available to opting-in independent publishers now.
About the author
Covering AI music tools, industry shifts, and news for music creators and professionals. Twice-weekly newsletter at aimusicpreneur.com.
