This week: OpenAI enters the music race, Spotify signs ‘responsible AI’ deals, labels push back

In this week’s Music AI recap:

• OpenAI reportedly developing its own generative music engine

• Spotify partners with major labels on “responsible AI” tools

• Record labels escalate lawsuits against Suno for song piracy

• Artists launch a boycott movement over Spotify’s AI practices

• Australia’s music streams drop 31% amid algorithmic bias

• Japan and Australia push back on AI copyright exemptions

• Inside the rise of AI-driven schools in the US and beyond

• More key stories shaping the future of music and AI this week.

In a world of accelerating change, September-October felt like an eruption. Yet on another level these are just the early signs of what is to come.

We are seeing the music charts now being hit by AI generated material. Record labels have now just commenced entering into distribution agreements with the new generation of artists with no music training, just AI. Whilst the public has started consuming this material, surveys currently show a massive preference for content produced by a human being.

Into this environment, the record labels are both in legal action against the big music AI companies, whilst there are rumours of imminent deals within the industry. And then into this Spotify have announced a deal with record labels to explore “responsible AI.” But what does responsible mean? Spotify had been using spam tracks to flesh out play lists and depress payments to artists. Now we have a movement by artists to boycott Spotify. [Note part of the latest Spotify announcement is pruning 75m “spammy tracks”.

AI is posing huge questions across so many sectors. We also want to highlight what is happening in education. Is it boosting our capability and creativity, or reducing it? The AI giants are pushing into educational institutions aggressively. The CEO of Duolingo notoriously said in May 2025, “AI is a better teacher than humans – but schools will still exist because you still need childcare.” Surveys out of the US and Australia suggest reasons for concern, yet at the same time we are seeing the entry of new schools such as Alpha in the US moving to deeply AI driven teaching processes, to those that can afford them. The whole world is focused on these issues.

Governments are struggling to come to terms with AI across a range of issues. The tech giants argue [of course] it is better to let go of part of rules that are deemed no longer fit for purpose to drive innovation, which is being ferociously resisted by the creative community. Japan is challenging OpenAI’s Sora as infringing on copyright re anime. In Australia there was uproar in response to a proposal by the Tech Council of Australia to the Productivity Commission that technology firms should be exempt from copyright rules that stop companies mining text and data to train AI models. The Australian Federal Government came out at the end of October to confirm that there would be no relaxing of copyright laws. This seems “good news”, but is it enough? Hardly. Australian music industry association Apra Amcos reports share of Australian music downloads has fallen 31% over the past 5 years. This has been attributed to the operation of algorithms in social media, with the big population driven US bias. A response is required.

With all this stress the share market announces this as the AI Boom, or is it the AI Bubble? It was striking that OpenAI flagged at SXSW in Sydney that, contrary to the Tech Council of Australia, it did not need Australia to weaken copyright law. But many would argue that OpenAI with its key partners are creating new law unto themselves. The extraordinary expenditure that is being commissioned by OpenAI, over One Trillion Dollars, using an extraordinary funding approach between tech giants, building capacity way beyond anything which is understood as necessary in the current reality. But it could create a new reality. Or precipitate ecological disaster. Oh and OpenAI is now speculated to be building its own Generative AI music engine, and web browser, and…

Governments are bending over to attract part of this investment, at the same time as the impact of AI on community and ecology is unknown and potentially very frightening. This might be the biggest bubble in history, or its bizarrely too big to fail… at least in any conventional way. As AI is currently being deployed it is a significant threat to livelihoods, but it also will offer extraordinary opportunities. We think it is essential that we work together as a community to take this on. There will be many choices. Watch this space.

This week's news

Success of AI Music Creators Sparks Debate on Future of Music Industry
Non musicians using AI tools are releasing music that is entering “the charts”. As a result Music Labels have started signing up this new breed of Artist, meaning the entire creative space is on notice. Insurance Journal (Sep 3, 2025)

AI Isn’t Taking Over Yet: Consumers Vehemently Oppose Machine-Generated Media, Prefer Works ‘Created by a Real Person,’ Survey Finds
A new survey showed currently 90% of consumers in America believe “it’s important to know the media they consume is created by a real person.” Whilst artists should see this as supportive it does not mean that AI driven content won’t continue to rise and with it shift consumer expectations. We need to be actively engaged. Digital Music News (Oct 16, 2025)

Record labels claim AI generator Suno illegally ripped their songs from YouTube
Major record labels have escalated their lawsuit against Suno, alleging that the AI startup knowingly pirated songs from YouTube to train its generative AI music models. The Verge (Sep 23, 2025)



Music’s biggest labels are weeks away from major AI licensing deals
The big labels were reported to be in talks with tech heavyweights like Google and Spotify and AI startups including Klay Vision, ElevenLabs, and Stability AI, noting that they are simultaneously in legal action with Suno and Udio re copyright. Key issues are compensation for how music is used, requiring supporting measurement software. The Verge (Oct 2, 2025)



Spotify says it’s working with labels on ‘responsible’ AI music tools
And as had been reported Spotify flagged it had entered agreements with the major labels to develop “responsible AI products.”It said it was building a “state-of-the-art generative AI research lab and product team focused on developing technologies that reflect our principles and create breakthrough experiences for fans and artists.” The Verge (Oct 17, 2025)




The Ugly Truth About Spotify Is Finally Revealed
Given Spotify’s announcement re AI it is useful to get some context as to Spotify’s history. This piece is a good summary of Spotify’s “payola”. That assertion has been given implicit confirmation when Spotify just announced its eliminating 75m+ “spammy tracks” on its playlists, through which it depressed payments to artists. Honest Broker (Dec 20, 2024)



‘Death to Spotify’: the DIY movement to get artists and fans to quit the music app
In the past it was famous artists who would occasionally have it out with Spotify, but the anti Spotify movement seems to be growing. Now smaller artists are considering boycotting Spotify as the benefit in visibility is considered insufficient relative to giving their name to boosting Spotify’s credibility. The Guardian (Oct 13, 2025)



Educational Technology Companies Are Putting AI Before Educator Expertise
This article reviews how AI companies are seeking to reshape how educational institutions operate, raising profound questions. The risks are embodied in a statement made by the CEO of Duolingo in May 2025 quote sums it up. “AI is a better teacher than humans – but schools will still exist because you still need childcare.” Inside Higher Ed (Oct 23, 2025)



Rising Use of AI in Schools Comes With Big Downsides for Students
The US based Center for Democracy and Technology reported 85% of teachers and 86% of students used AI in the 2024-25 school year. The survey suggested that AI was making students feel less connected to teachers.

Artificial Intelligence in Australian Education
Research like this is taking place globally. There are serious issues being noted as to how AI is impacting diverse critical thinking skills. Eg A 2024 University of Melbourne study found 62% of secondary students using AI tools didn’t cross-check responses against other sources. Education Daily (Sep 24, 2025)

Inside San Francisco’s new AI school: is this the future of US education?
Alpha School in San Francisco says students can learn twice as fast as their counterparts in traditional schools, working only 2 hours a day – with the help of artificial intelligence. One of a chain of 14 such schools in America, this education is on offer… to those who can afford it. Obviously we need to understand what is happening in these classrooms. The Guardian (Oct 19, 2025)

Japan wants OpenAI to stop ripping off manga and anime
Japan’s government is dialing up the heat on OpenAI, formally asking it to stop ripping off Japanese artwork, according to ITMedia and reported by IGN. The company has been in copyright hell after the launch of its social video app Sora, which users swiftly filled with questionable AI-generated material. The Verge (Oct 16, 2025)



Australian Federal government rules out changing copyright law to give AI companies free rein
The government has definitively ruled out introducing a copyright exemption for artificial intelligence companies training their models on Australian creative works. Such a carve-out has been fiercely rejected by the creative sector, after it was floated in a Productivity Commission report. ABC (Oct 27, 2025)


Australia and New Zealand have seen a 31% collapse in streams of local music, APRA AMCOS says
The share of locally written or composed music streamed in Australia and New Zealand now accounts for just 9.5% of music streams in the two countries in 2024-2025. This represents roughly flat sales as streaming and user generated content has grown 50%. Music Business Worldwide (Oct 15, 2025)



Open AI breaks ranks with Tech Council of Australia over heated copyright issue
The Tech Council of Australia notoriously put to the Productivity Commission summit, and the Australian Government that copyright laws should be relaxed for AI companies wanting to train their AI, putting the creative sector into an uproar. It was striking that when OpenAI came to Australia, in part looking for support for its data centre strategy, it said its investment in Australia was not contingent on any such relaxation. OpenAI’s statements here are intriguing. More on that below. The Guardian (Oct 17, 2025)



OpenAI has five years to turn $13 billion into $1 trillion
Open AI’s annual revenue is “only” 13bn, yet it and Nvidia through a string of cross investments between themselves and some of the major technology hardware and software companies are together funding a $1tn data centre program. This raises extraordinary questions. Who has the money to pay for the services these data centres will provide in a world where they might be wiping out a huge chunk of existing jobs, and many companies. Is this a bubble, or being too big to fail will reshape the world in its image. What are the environmental effects? What should governments do? What should the community do? This is one of the biggest questions facing the world. We believe it is critical we keep our communities informed, and able to have agency in the world that is being created. TechCrunch (Oct 27, 2025)



OpenAI, valued at $500bn, reportedly working on generative AI music tool
Surprise, surprise. So you thought Suno and Udio might be the problem. This puts OpenAI’s view on copyright into a new light. Music Business Worldwide (Oct 27, 2025)



AI data centre frenzy threatens govt emissions goals [24 Sept 2025]
Expansion of data centres is set to create massive electricity demand, driving potential carbon emissions through the roof, as well as demand on other resources, such as water. How sustainable is this AI boom both on communities and planet. Big issues. Information Age (Sep 24, 2025)