Streaming services are starting to draw lines around AI music — and Tidal has picked a notable one. The platform said that from July 15 it will stop paying royalties on tracks it identifies as fully AI-generated, label them with an "AI" badge for listeners, and bar them from earning payouts or direct-to-fan sales, TechCrunch reported. Crucially, it won't remove those tracks — only demonetize them. (It will, however, take down AI music that impersonates real artists' voices or likenesses.) Tidal called the policy a "living document" that could later extend to partly AI-made music, per Music Business Worldwide.

The money problem behind it

To see why this matters, you have to understand how streaming pays. Most services use a pooled, pro-rata model: they collect subscription and ad revenue, keep a cut (commonly around 30%), and split the rest among rights-holders by share of total streams. Each play is worth a tiny fraction of a cent, and that per-stream value is just the pool divided by all streams.

That's the vulnerability. When cheap, mass-produced AI tracks pour in and rack up streams — sometimes via fraudulent bot plays — they enlarge the denominator, siphoning money away from human artists. The scale is real: rival Deezer has said roughly 44% of the new tracks uploaded to it each day are AI-generated, and that it has demonetized a large majority of streams on the AI tracks it flags. Demonetizing — rather than paying — removes the financial incentive to flood the platform.

How Tidal's approach compares

Streamers are converging on the problem but splitting on tactics. Spotify has emphasized removing large numbers of AI tracks and screening uploads; Apple Music and others have leaned toward labeling AI content. Tidal's bet is on demonetization as the main lever — keep the track, drop the money. The appeal: it sidesteps the hard, contested job of deciding exactly what counts as "AI" and avoids the free-speech optics of deletion, while still cutting the economic incentive to spam.

The bigger fight

This sits inside a much larger battle over AI and music rights. Record labels have sued leading AI-music startups over training their models on copyrighted songs, and the industry has been split between litigation and licensing deals — some majors striking partnerships to license catalogs to AI firms on their terms, others still fighting in court, with key rulings pending. (Specific settlements and case outcomes are evolving; treat them as a moving landscape.) Tidal itself is majority-owned by Block, the fintech company formerly known as Square, which bought control of the service in 2021 and later dialed back its investment.

Why it matters

For the economics of streaming, Tidal's move is a small but telling marker: platforms are trying to protect the human-artist royalty pool from AI dilution without banning AI music outright — a middle path that may become the template. For AI-music makers, it signals that the easy money from flooding platforms with synthetic tracks is getting harder to earn. The open question is whether demonetization alone deters bad actors, or just pushes the problem around. Either way, the era of streaming services treating all uploads — human or machine — as equally payable is ending.