FirstFT: Google and Universal Music discuss deal over AI ‘deepfake’ songs

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Good morning. Google and Universal Music are in talks to license artists’ melodies and voices for songs generated by artificial intelligence as the music business tries to monetise one of its biggest threats.

The discussions, confirmed by four people familiar with the matter, aim to strike a partnership for an industry that is grappling with the implications of new AI technology, including a surge in “deepfake” songs that can convincingly mimic the voices, lyrics or sound of established artists, often without their consent.

Frank Sinatra’s voice has been used on a version of the hip-hop song “Gangsta’s Paradise” while Johnny Cash’s has been deployed on the pop single “Barbie Girl”. A YouTube user called PluggingAI offers songs imitating the voices of the deceased rappers Tupac and Notorious B.I.G.

As AI has gained traction, some big stars have expressed anxiety that their work will be diluted by fake versions of their songs and voices. In April, Drake slammed a song that used AI to mimic his voice, calling it “the final straw”, while rapper Ice Cube has described such cloned tracks as “demonic”.

Discussions between Google and Universal Music are at an early stage and no product launch is imminent, but the goal is to develop a tool for fans to create these tracks legitimately and pay the owners of the copyrights for it, said people close to the situation. Artists would have the choice to opt in, the people said.

Here’s what I’m keeping tabs on today:

• Economic data: China’s inflation figures are due, with expectations of 0.4 per cent deflation in July after prices were stagnant in the previous month. Russia also reports inflation data.

• Results: Sony and Honda Motor report earnings, as does Walt Disney. Streaming losses, TV woes and box office flops are expected to be a drag on Disney’s quarterly results, the FT reports.

• Pakistan: Prime minister Shehbaz Sharif plans to dissolve his government today and hand over power to a caretaker administration, the standard practice ahead of a general election. But the election is expected to be delayed until early next year after the decision by a Sharif-led committee to redraw the country’s electoral boundaries on the basis of a recently completed census. Analysts say the delay puts Pakistan’s fragile democracy at risk.

• Singapore National Day: Financial markets will be closed to mark the anniversary of Singapore’s independence from Malaysia in 1965.

Five more top stories

1. China’s trade slumped in July, with exports and imports falling more sharply than expected, fuelling concerns over growth prospects for the world’s second-biggest economy. Exports declined by 14.5 per cent year on year in dollar terms, the worst fall since the outset of the pandemic in February 2020. Read more on the latest disappointing economic data from China.

• Property sector turmoil: Country Garden, China’s biggest private developer by sales, has missed interest payments on two international bonds as it battles to stave off a liquidity crisis that has derailed the property sector and dragged on economic growth.

2. Taiwan Semiconductor Manufacturing Company has teamed up with automotive supplier Bosch and chipmakers Infineon and NXP to build a €10bn factory in Germany. The world’s largest contract chipmaker hopes to diversify globally in response to concerns over geopolitical tension and becomes the latest tech group to make use of Berlin’s subsidies to lure chipmakers. Read more on the project.

3. Dentons, the largest western law firm in China by staff, is hiving off its operation in China in response to the “evolving regulatory environment for Chinese law firms”, it said in an email sent to clients. The decision comes as the Chinese government expands cyber security and data protection laws on national security grounds, which have hit foreign companies. Here’s more on Dentons’ decision.

4. SoftBank Group failed to turn a profit for a third consecutive quarter, recording a ¥477.6bn ($3.3bn) loss for the three-month period ending in June despite a recovery at its flagship Vision Fund investment unit. The quarterly loss defied analyst predictions that the group would return to profit following a steady recovery in the tech-heavy Nasdaq index. Take a deeper look at the results.

5. Ukraine has arrested a woman who was allegedly gathering information on President Volodymyr Zelenskyy’s travel details to help Russian forces carry out an assassination attempt. In a separate case, the intelligence service alleges to have uncovered a female spy ring working for both Russia’s Federal Security Service and the Wagner paramilitary group. Read the full story.

The Big Read

From the Democratic Republic of Congo to Indonesia, the handful of countries that dominate the production of metals critical to the green transition are seeing their fortunes transform. As the world moves from an energy system built on fossil fuels to one powered by renewables, the global demand for materials such as copper, cobalt, nickel and lithium is only going to grow.

We’re also reading . . . 

Chart of the day

Sales of cross-border debt denominated in renminbi have boomed this year, as relatively low yields in China’s bond market boost Beijing’s drive to increase the international footprint of its currency. Issuance of renminbi-denominated “panda” bonds by foreign issuers in China so far this year has already surpassed the full-year record set in 2021.

Take a break from the news

A visit to London’s Imperial War Museum can be challenging. The stories of loss and suffering are difficult to digest, writes FT graphic artist Ian Bott, but this also makes visiting all the more important. Check out Bott’s immersive guide to the museum, complete with his own illustrations.

Additional contributions from Tee Zhuo and Gordon Smith