Industry 
In March 2026, the UK government shelved plans for a broad text and data mining (TDM) exception to copyright infringement, with a rightsholder ‘opt-out’ mechanism for AI training goals. The pause on regulation followed sustained pushback by the UK creative industries and underlined the central role of copyright protection to creators’ economic position and futures. Copyright remains the critical legal, economic and creative foundations on which the UK creative industries stand, as they provide the protections that incentivise creative work. The government’s adoption of a ‘wait-and-see’ approach highlights the complexity of the issue and underlines the importance of taking the right steps at a pace that aligns with the concerns of stakeholders. At the same time, rapid advances in AI complicate the copyright question: AI systems require large volumes of creative outputs for training, while AI-generated outputs also compete directly with human creators and weaken the impetus and incentives for originality and creativity.
Policymakers face the difficult challenge of supporting innovation in AI without weakening the incentives that drive creative production. A crucial focus of AI policy in the light of this ongoing debate should therefore be on strengthening transparency and developing effective licensing and assurance mechanisms that support both innovation and creative enterprise.
Transparency at the Heart of the Copyright Debate
Recent interventions by creative organisations and rightsholders highlight transparency as the central demand in the copyright and AI debate. Many corporations and organisations have become more vocal and proactive in copyright regulation and creative rights. For example, the Creators’ Rights Alliance (CRA) has only just launched a major statutory transparency petition calling for clearer disclosure of copyrighted materials used for training AI systems. Major music publishing companies, Sony Music and Warner Chappell, are also seeking damages for theft and misuse of copyrighted songs by Anthropic. In the wake of severe backlash and boycotts from musicians and independent labels, Spotify has also introduced a new label for AI-generated artist identities. Current legal precedents, most notably from the German Music Collecting Society (GEMA) v. OpenAI ruling by the Munich Regional Court, have focused on the memorisation of copyrighted works within AI models and their subsequent reproduction in model outputs.
The transparency debate contains two distinct aspects that should not collapse into one. The first concerns developer-side transparency that determines that AI companies show what copyrighted works have been used to train their systems. The second is output-side transparency that instead requires commercial platforms and markets to label creative works that have been AI-generated. While the former protects creators’ rights in relation to their creative contributions, the latter enhances public trust, fair competition, and the true value of human creativity in AI-dominated markets.
These concerns have also been featured prominently in parliamentary discussions. In a recent All-Party Parliamentary Group for Data and Emerging Technologies’ (APGDET) roundtable on AI, Copyright and the Creative Industries, key stakeholders across the Creative Industries, academia and regulatory bodies, emphasised the necessity of greater transparency, clearer licensing agreements, and practicable mechanisms of assurance. For the UK, this debate is crucial because the creative industries are a major cultural and economic asset, contributing the most value across the culture, media and sports sectors to the UK economy.
Why the Creative Industries Matter
In 2024, the UK creative industries contributed about £145.8 billion in Gross Value Added (GVA), representing around 5.6% of total UK GVA. This was roughly 12 times the £11.8 billion GVA contributed by the AI sector in the same year (DCMS Economic Estimates: Annual GVA 2024). The creative industries also grew by an estimated 4.6%, around four times the rate of growth of the UK economy as a whole. At the same time, AI adoption and use in the UK creative industries is higher than across the wider UK economy. Taken together, this shows that the creative industries are a substantially larger part of the UK economy than the AI sector itself, while also being one of the areas where AI is being integrated most extensively into existing economic activity.
Policy Recommendations to the Copyright Challenge
Strengthening Transparency in AI Training
To protect the UK’s burgeoning creative capital, it becomes important not just to reject broad copyright exemptions, but to likewise enforce data transparency and provenance tracking, and establish fairer AI-specific licensing markets. Firstly, it is important for public trust that rightsholders understand and retain agency of how their protected creative works are used by AI developers. It is equally important for AI developers to clearly outline the provenance of their data, in terms of its source and subsequent data modifications. This can be achieved through careful watermarking of creative files even after content scraping and modification. AI developers can also keep distributed ledgers, housing records of training datasets, and licensing agreements such as the standardised AI and data bills of materials (AIBOMs). Data governance and privacy startups have proposed this model of a data bill of materials (DBOM), alike to the Software Bill of Materials (SBOM), as essential tools for managing security risks. The DBOM provides comprehensive information on data use, data collection, and data location, serving the goals of improving transparency and increasing public trust. Research also supports the integration of blockchain in effectively implementing this recommended tool.
Adopting a Fair and Inclusive Licensing-First AI Economy
In addition to this, the adoption of a licensing-first model is recommended, where AI developers endeavour to obtain explicit permission and compensate creators or rightsholders before making use of their copyrighted works for AI training and development. The House of Lords Report on AI, Copyright and the Creative Industries, articulates the significant opportunity for a UK AI licensing market in this moment. This market model shifts the burden of compliance to the shoulders of AI developers, and away from creators. Existing marketplaces such as the UK’s Creative Content Exchange (CCE) can serve as important platforms for safe and reliable transaction of high-quality data for AI training and development. There is also crucial consideration of supporting fairer licensing regimes that help smaller and independent creatives to retain ownership of their intellectual property and receive prompt compensation for use of their work.
Legislating Transparency in Creative Outputs
Conversely, for creatives, there is a growing expectation of transparency in how AI is used in inspiring, driving, and enhancing the creative process. It is important to point out, nonetheless, that while the myth of the lone genius is popular, it fails to piece together the significant underlying pages of collaboration and shared inspiration that lighten up each creative story. Our definitions of creative genius should therefore shift with the zeitgeist to capture novel collaborative engagements between the creator and AI, and what these mean for copyright protections. There are already some legal precedence around these issues that further deepen the ongoing debate on copyright and AI. The predominant expectations, however, are transparently declaring one’s use of AI to strengthen public trust in creative outputs. The key recommendation would be for commercial platforms that host creative content to also enable proper labelling of these outputs. Some work is already being done on this front across commercial platforms, but more could be done in strengthening this practice.
Conclusion
Across these recommendations, the main takeaway is the inviolable importance of consolidating the UK’s creative capital. On this basis, the challenge for UK policymakers should not be the mistaken assumption of choosing between AI and its creative industries. The UK’s future prosperity rests on both pillars, and the crucial task is one of balancing the advances in AI innovation with the UK’s thriving creative economies. The goal, therefore, would be to capitalise on opportunities to make the UK a model for how innovation and creative enterprise can flourish together.
As a follow-up from the roundtable on AI, Copyright and the Creative Industries, the APGDET will be issuing a briefing to the new Minister in charge of copyright on some of the key policy recommendations made.
If you would like to contribute to upcoming APGDET work, please contact Lavanya Rangarajan at lavanya.rangarajan@policyconnect.org.uk.
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