“That’s just not a service we’re going to provide,” Microsoft AI CEO Mustafa Suleyman said at the Paley International Council Summit in Menlo Park, California, on Thursday. “Other companies will build that.”

Earlier this year, Elon Musk, CEO of xAI, said in an X post the startup’s AI bot Grok could take on the form of companions, such as young women who look like anime characters, for subscribers. And last week, OpenAI CEO Sam Altman announced ChatGPT would soon be able to generate erotic content for verified adult users.

Altman explained the company’s decision to add more explicit sexual capabilities would require age verification and is part of an ethos to “treat adult users like adults.”

“As AI becomes more important in people’s lives, allowing a lot of freedom for people to use AI in the ways that they want is an important part of our mission,” Altman wrote on X.

Microsoft and OpenAI growing apart

The division on attitude toward generative-AI chatbot erotica comes as Microsoft and OpenAI, once close partners, have begun going their separate ways. The AI startup received $13 billion in investments and computer power from Microsoft since 2019, but last month reportedly inked a $300 billion computing deal with Oracle, a Microsoft rival. Meanwhile, Microsoft has developed its own AI software, including its planned fall release of Copilot, an AI assistant for its Windows operating system and Edge web browser, that promises “human-cented” AI tools. 

Suleyman has previously eschewed the idea of machine consciousness, warning AI systems that can mimic human language and behavior makes them harder to regulate and ultimately best serve humans. It was an idea he doubled down on in fresh comments this week.

“You can already see it with some of these avatars and people leaning into the kind of sexbot, erotica direction,” Suleyman said Thursday. “This is very dangerous, and I think we should be making conscious decisions to avoid those kinds of things.”

OpenAI did not respond to Fortune’s request for comment. XAI responded, “Legacy Media Lies.”

Erotic chatbot controversy

Those outside the AI space have also criticized OpenAI and xAI’s decision to integrate more sexual content into their respective chatbots.

Billionaire investor Mark Cuban warned parents might abandon ChatGPT if they believe their children can skirt the age-verification protections put in place, instead favoring OpenAI’s competitors.

“This is going to backfire. Hard,” Cuban wrote on X in response to Altman. “No parent is going to trust that their kids can’t get through your age gating. They will just push their kids to every other LLM. Why take the risk?”

Altman, in return, said his company was “not the elected moral police of the world.”

Jessica Ji, a senior research analyst at Georgetown’s Center for Security and Emerging Technology, told Fortune’s Bea Nolan OpenAI is in a precarious position of imagining the future of ChatGPT’s capabilities: The company has received signals from consumers there’s a demand for erotic content on the app, but it must balance market interests with its promise to investors of making AI products that benefit humanity.

“Despite some of the narratives around building artificial general intelligence that will supercharge the economy, OpenAI is still trying to operate as a technology platform, and somewhat like a social media company,” Ji said. “There’s an interesting tension between the narratives that are being sold to investors and politicians…versus the things that are actually happening in the market.”

United Arab Emirates-based collective management organization Music Nation Copyrights Management has formally started operations.

The company received approval from the UAE government in June to operate a CMO in the country.

Music Nation will now administer public performance and mechanical rights across the UAE, drawing on its partnership with US-based PRO Broadcast Music, Inc. (BMI). Additionally, US-based CMO SoundExchange provides Music Nation with neighboring rights administration.

As part of the launch, Amer M. Samhoun has been appointed Chief Executive Officer, James K. Petrie as Chief Operating Officer, and Ali Dee as Chief Creative Officer.

They report to Rasha Khalifa Al Mubarak, Founder and Chairwoman of Music Nation, and will work from offices in Abu Dhabi and Dubai.

In a note sent to publishers, rights societies, and industry partners regarding the launch, Al Mubarak, noted that “with the tireless support of the UAE Ministry of Economy and Tourism, and in partnership with BMI and SoundExchange, beginning today, Music Nation is licensing, collecting, distributing, and protecting royalties across public performance, mechanical, and neighboring rights”.

Al Mubarak added: “This means creators, songwriters, composers, publishers, artists, and sound recording owners will finally be fairly and transparently compensated, in line with the UAE’s legislative framework, for the use of their work in the Emirates.”

“Our mission is clear: make licensing simple and provide accurate and timely royalty distributions to creators and rightsholders.”

Rasha Khalifa Al Mubarak

Elsewhere in the note, Al Mubarak said: “By building a modern rights infrastructure, we’re also laying the foundation for local creatives to establish lasting careers in music. Around the world, rights organizations serve as the heart and soul of a thriving music economy and Music Nation will proudly fill that role for the UAE, ensuring our artists are both recognized and rewarded for their creativity.

“Our mission is clear: make licensing simple and provide accurate and timely royalty distributions to creators and rightsholders. To deliver on that promise, some of you have already met my leadership team with many decades of experience in business and music.”

Music Nation launches with what it claims to be “advanced song matching accuracy by integrating with the global databases of BMI and SoundExchange, reducing unmatched royalties and accelerating payouts”.

The company claims to be the first rights organization in the region to provide a “single platform uniquely capable of combining streamlined licensing for public venues, broadcasters, and events, with transparent reporting and on-time distributions for creators”.

Music Nation offers multilingual support and outreach, and says it “will continue to serve as an education and onboarding partner, helping businesses obtain proper licenses and enrolling rightsholders to receive comprehensive royalty payments”.

“Today marks the start of a new era for artists in the UAE,” said Rasha Khalifa Al Mubarak, Founder and Chairwoman of Music Nation.

“With Music Nation’s technology and a leadership team that understands both the UAE’s cultural fabric and global music operations, we’re delivering a simple, transparent, and modern licensing solution that easily licenses businesses and quickly pays creators.”

“BMI is proud to partner with Music Nation as it builds the foundation for a thriving, transparent music rights ecosystem in the UAE.”

Mike O’Neill,  BMI

Said Michael O’Neill, President & CEO, Broadcast Music, Inc: “BMI is proud to partner with Music Nation as it builds the foundation for a thriving, transparent music rights ecosystem in the UAE.

“Our shared mission is to ensure that songwriters, composers, and publishers are properly compensated for the use of their music—wherever it’s played. Music Nation’s launch represents a major step forward in expanding that mission globally and empowering creators across the region.”

“SoundExchange shares Music Nation’s mission to build a fair and efficient rights management system for recording artists and rights holders in the UAE.”

Michael Huppe, SoundExchange

Michael Huppe, President & CEO, SoundExchange, added: “SoundExchange shares Music Nation’s mission to build a fair and efficient rights management system for recording artists and rights holders in the UAE.

“We’re proudly partnering with Music Nation and BMI to ensure artists and rights holders everywhere are properly compensated for the value their music creates in the global marketplace.”

“Music Nation’s mandate is clear: make licensing easy for businesses and ensure artists are paid quickly and fairly.”

Amer M. Samhoun

“Music Nation’s mandate is clear: make licensing easy for businesses and ensure artists are paid quickly and fairly,” Samhoun said.

“With our ongoing hands-on education for the business and creative communities, an artist-first mentality and best-in-class partnerships and data, Music Nation stands ready to deliver on day one.”Music Business Worldwide

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