MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. Only MBW+ subscribers have unlimited access to these articles. The below article originally appeared within the latest MBW+ Review email, issued exclusively to MBW+ subscribers.
What’s the most worrying thing you’ve seen in the 2024 US election so far?
I know, I know – we’re spoiled for choice. From one party leader near enough calling their opponent an actual Nazi to that “they’re eating the dogs” debacle and, most recently, a repugnant ‘joke’ made by an idiot targeting Puerto Rico.
But (he says, gingerly tiptoeing around choppy political waters), I’ll posit that for the music industry specifically, something even more troubling is going on.
The website OpenSecrets is a goldmine of information for those interested in who’s really running US politics — i.e. its paymasters.
OpenSecrets allows you to view both the individuals and organizations who have donated the largest sums to US political campaigns over the past year, whether via direct contributions, PACs (political action committees), federal 527 organizations, or other means.
(Technically speaking, companies can’t legally donate to US political candidates, but their founders can, as can those founders’ family members.)
“one name among the largest 2024 US election-cycle donors is striking: Andreessen Horowitz.”
Much of the information you’ll find on OpenSecrets isn’t a great surprise.
For example, it says that Space X’s Elon Musk (USD $76 million) and Blackstone CEO Stephen Schwarzman ($39 million) have jointly donated over $100 million to the Republicans over the past year. Leading Democrat donors in the same timeframe include Michael Bloomberg ($43 million) and LinkedIn founder Reid Hoffman ($32 million).
Yet one name among the largest 2024 election-cycle donors is a little more striking: Andreessen Horowitz.
The CA-based tech investment firm is the 10th biggest donor to either party by contribution size. So far, it’s bankrolled just shy of $53 million to 2024 campaigns.
In doing so, Andreessen Horowitz is hoping to achieve that grand old American tradition: buying influence
The bulk of Andreessen Horowitz’s donations have gone to a ‘Super PAC’ called Fairshake, which backs representatives who are sympathetic to less regulation for crypto in the US.
Conversely, Fairshake also terrifies lawmakers who might not be sympathetic to the crypto agenda. The PAC reportedly ran relentless attack ads against one Democrat representative in Orange County earlier this year, branding her a “bully” and a “liar”.
She bombed at the polls in a senate primary, taking just 15% of the local vote.
As Charles Duhigg recently wrote in the New Yorker: “The tech industry has quietly become one of the most powerful lobbying forces in American politics… it is wielding that power as previous corporate special interests have: to bully, cajole, and remake the nation as it sees fit.
Naturally, crypto isn’t the only Big Tech focal point on Andreessen Horowitz’s mind.
It’s also very keen on extinguishing legal punishment for the unauthorized use of copyright by generative AI platforms.
Which brings us back to the music business.
Andreessen Horowitz is best known as a backer of tech titans like Airbnb, Twitter, Facebook, Stripe, Ripple, Roblox, and Substack.
Yet in music, the company’s name is infamous for a different investment.
AH led a USD $10 million funding round earlier this year into Udio, a generative AI-music-maker that spits out 10 songs a second.
Like rival Suno, Udio is being sued by major music companies for alleged mass copyright infringement. Both platforms have admitted training their AI on copyrighted music but make the legal case that this is “fair use” under US law.
From Udio’s filing with a New York District Court in August: “Under longstanding doctrine, what Udio has done — use existing sound recordings as data to mine and analyze [to] enable people to make their own new creations — is a quintessential ‘fair use’ under copyright law.”
“This is all deeply troubling for music industry rightsholders (and their investors).”
This argument is almost Xeroxed directly from another important AI-related document in this story: Andreessen Horowitz’s own filing with the US Copyright Office from last year, in which it argued that generative AI platforms in the US must be able to imbibe copyright material with legal impunity. Otherwise, AH argued, hitting at a central insecurity of politicians, the US will be “outpaced” in the development of future technology by China.
“There is a very real risk that the overzealous enforcement of copyright when it comes to AI training… could cost the United States the battle for global AI dominance,” AH wrote.
It’s a fair supposition that Andreessen Horowitz is now hoping to amplify this message in the corridors of US political power, using a $53-million-shaped megaphone.
Other companies making large political donations in this US election cycle include Alphabet/Google, which has also filed with the US Copyright Office to argue that music being ingested by AI models is “fair use”. OpenSecrets says that Alphabet has made USD $12.3 million in 2024 political contributions so far.
This is all deeply troubling for music industry rightsholders (and their investors), who are understandably desperate to prevent any loosening of legal protections that prevent the flagrant mass infringement of copyrighted assets.
There have been flashing danger signs of late on this topic coming out of my home nation, the UK, and the recently-elected Labour government, led by Keir Starmer.
In July, Starmer’s government—via the UK King’s Speech—was widely expected to set out the basic principles of an ‘Artificial Intelligence Bill’ that would make it clear that music could not be ingested by large language models (LLMs) powering AI platforms without express permission from copyright holders.
Weirdly, the bill never appeared.
Then, on October 14, Starmer hosted an ‘Investment Summit’ where he appeared alongside ex-Google CEO Eric Schmidt. Starmer’s message very clearly tilted towards de-regulating AI platforms.
“Are we leaning in and seeing this as an opportunity, as I do?” said Starmer of generative AI. “Or are we leaning out, saying ‘this is rather scary, we better regulate it,’ which I think will be the wrong approach.”
“Tellingly, Eric Schmidt and Keir Starmer’s snuggle-up arrived one month after Google published an optimistic-sounding white paper: Unlocking The UK’s AI Potential.“
Schmidt thought Starmer’s attitude was just marvelous. So much so, the ex-Google man half-joked that the UK should appoint a “Minister of Deregulation”.
Tellingly, Schmidt and Starmer’s snuggle-up arrived one month after Google published an optimistic-sounding white paper: Unlocking The UK’s AI Potential.
Within that document, Google called for a “text and data mining” (TDM) exception to UK copyright law… aka: Let us scrape what we want for our AI models, without any requirement for express permission.
Two weeks ago, the other shoe dropped.
The Financial Times reported that Starmer, cozying up to Big Tech, was indeed considering making a copyright exception for AI platforms scraping copyright material in the UK – unless copyright holders actively “opt out” of each individual use.
This is the direct opposite of the music industry’s preferred framework. (The likes of Sony are already preparing for doomsday, pre-emptively notifying hundreds of tech companies that it is “opting out” of having its catalog cleared for AI training.)
The most scorching quote on Keir Starmer’s reported plans for “opt-out” AI comes from Justine Roberts, the founder of Mumsnet, an online forum for mothers that has already launched a legal complaint against OpenAI for allegedly scraping its content.
Roberts says an “opt-out” framework is “akin to requiring homeowners to post notices on the outside of their homes asking burglars not to rob them, failing which the contents of their house are fair game” .
Adds Roberts: “Some in government seem to have drunk the Kool-Aid and are buying the heavily pushed story that everything needs to be cleared out of the way to ensure AI’s rapid development. When, in fact, they should be mindful of Big Tech’s rapacious appetite for dominance and dollars and of what gets destroyed along the way.”
Dominance and dollars. That’s a large language model that Andreessen Horowitz already speaks fluently.
Right now, it’s whispering it into the ear of the next President of the United States.Music Business Worldwide