UK government backs away from AI copyright overhaul as licensing emerges as the battleground

"The consultation attracted more than 11,500 responses, with the overwhelming majority of creators, publishers and rights organisations rejecting the proposal outright. Ministers now concede that a broad exception "with opt-out is no longer the government's preferred way forward", citing strong industry opposition, lack of consensus, and insufficient evidence on economic impact."

"This represents a notable victory for the UK's creative sectors, from publishing and music to film and photography, which argued that such an exception would effectively legalise uncompensated use of their work by generative AI systems."

"Instead, the government is opting for a more cautious, evidence-led approach, prioritising transparency obligations and allowing a nascent but rapidly expanding licensing market to develop. The move marks a significant recalibration of policy at a time when the UK is seeking to position itself as both an AI superpower and a global creative hub."

The UK government has reversed its proposed broad copyright exception for AI training that would have allowed developers to use copyrighted material unless creators opted out. Following consultation with over 11,500 respondents, the government acknowledged overwhelming opposition from creative industries including publishers, musicians, filmmakers, and photographers. The March 2026 report confirms the opt-out exception is no longer preferred policy, citing insufficient evidence on economic impact and lack of consensus. Instead, the government is pursuing a more cautious, evidence-led approach emphasizing transparency obligations and allowing the licensing market to develop naturally. This represents a significant policy recalibration as the UK attempts to balance AI economic growth with intellectual property protection.

Read at Business Matters