SoundCloud's 100% royalty offer may actually be a Trojan horse for AI training

SoundCloud recently announced one of the most artist-friendly policy changes in its history: starting in late November 2025, the company will no longer take a share of distribution royalties. Artists using SoundCloud for distribution will keep 100% of what they earn when their music is played on Spotify, Apple Music, TikTok, and the 61 other platforms supported by SoundCloud’s distribution pipeline. Musicians have always kept 100% of royalties generated on SoundCloud itself. However, extending this to external platforms is a major shift that could meaningfully boost independent creators’ income.

SoundCloud also plans to introduce fee-free fan-to-artist financial support for US users. Through a new “Support” button on artist profiles, fans will be able to donate directly; SoundCloud won’t take a commission, and top supporters will be visibly recognized. “SoundCloud has always been about putting artists first,” CEO Eliah Seton said in a recent statement.

But despite these pro-artist moves, SoundCloud now finds itself in the middle of a growing controversy over how the company handles artificial intelligence (AI).

Musicians push back on SoundCloud’s AI wording

The tension began with SoundCloud’s February 2024 Terms of Use. This stated that users “explicitly agree that [their] Content may be used to inform, train, develop or serve as input to artificial intelligence or machine intelligence technologies or services.” This broad language sparked heavy criticism at the time.

In an effort to address the backlash, SoundCloud rewrote the clause. The current Terms state: “We will not use your content to train generative AI models that aim to replicate or synthesize your voice, music, or likeness without your explicit consent, which must be affirmatively provided through an opt-in mechanism.”

At first glance, this sounds like the reassurance artists were asking for. But many independent musicians say the update actually adds more uncertainty, not less. The key issue is with the phrase “your voice, music, or likeness.” By limiting the restriction to AI models that replicate an individual artist, SoundCloud leaves open the possibility of using uploaded tracks to train general generative AI systems — as long as those systems are not designed to mimic a specific person. That distinction is exactly what has frustrated many users. One Reddit commenter, nova-new-chorus, expressed the prevailing sentiment: “Why not just say we won’t use your data to train any AI algorithm?”

A second clause offers protection — but not for most artists

The updated Terms include a more restrictive provision: “Neither SoundCloud nor any third party is allowed to use, copy or reproduce any Content delivered to the Platform under separate agreements, which is owned or controlled by third-party rightsholders… for the purposes of informing, training, developing (or as input to) artificial intelligence technologies without authorization from the applicable rightsholders.”

This sounds reassuring — but only applies to content delivered under separate agreements and content owned or controlled by third-party rightsholders (labels, distributors, publishers, etc.) Independent artists who upload music directly to SoundCloud do so under the platform’s standard user-upload license, not under a separate agreement.

As a result, this protective clause does not cover the vast majority of SoundCloud creators. This creates what many see as a loophole. For example, while SoundCloud promises not to train models that replicate your voice or style without permission, the Terms do not clearly prohibit using your songs to train general-purpose generative AI, such as systems that create new music unrelated to your sound. Whether SoundCloud intends to do this is unclear — but legally, the door appears open.

SoundCloud insists it doesn’t use artist content for AI training

On May 14, 2025, CEO Eliah Seton published a letter attempting to calm concerns. In it, he wrote: “SoundCloud has never used artist content to train AI models… We don’t build generative AI tools, and we don’t allow third parties to scrape or use artist content from SoundCloud to train them either… The ‘no AI’ tag explicitly signals content on SoundCloud can’t be used for AI training.”

Seton also stated that if SoundCloud ever offers AI tools to artists, it will only do so with explicit, opt-in consent. But these assurances have not resolved the confusion around the platform’s legal language, particularly the repeated references to “human artists” — wording that some musicians see as needlessly distancing.

SoundCloud’s growing investment in AI raises further questions

Part of the unease stems from SoundCloud’s recent partnerships with AI vendors. Last year, the company began offering six new generative-AI tools for creators. These include Tuney for remixing, editing, and generating musical tracks, AIBeatz for beat generation and customization, and ACE Studio — an AI vocal generator capable of producing studio-quality singing from lyrics and MIDI.

Seton defended these initiatives to Music Ally, saying: “With generative AI tools, as long as we get the right ethical, legal and commercial framework in place, those tools are putting the ability to play with music and become a music creator in the pockets of everyone — like Instagram turned two billion people into photographers.”

SoundCloud positions these tools as democratizing music creation. However, critics argue that the platform cannot champion AI advances while keeping vague terms about how artists’ own recordings might be used in the process.

The bottom line

SoundCloud is making genuine, financially meaningful moves to support independent artists — notably through 100% royalty retention and fee-free fan contributions. But its AI policy remains unclear, and the company’s own Terms of Use leave open the possibility that uploaded music could be used to train non-replicative generative AI models.

Whether SoundCloud intends to use artist uploads in this way is another matter. The company insists it has never done so and will not do so without consent. But until the Terms are updated with unambiguous language, many musicians remain skeptical.