“So here’s a real surprise,” said Ary Attie, holding open a hidden door in the bowels of the Walker Hotel in the city’s Greenwich Village neighborhood. “There used to be a lot more cool, interesting places in New York—and there’s still a few left.”

Attie, the 30-year-old founder of Klay, a new AI music startup, has a taste for such theatrics. And he was smiling widely a couple days ago as I followed him down several corridors, turning into a narrow hallway with a janitor’s closet at the other end. We seemed to have no place to go—until the closet’s back swung on its hinges, revealing a speakeasy-like entrance to a plush den containing sofas, armchairs and high-end stereo equipment. A music manager friend had hooked him up with the place for the day.

Attie had flown in from Los Angeles to talk about a blockbuster announcement his startup had made the prior week. Klay has struck licensing agreements with each of the major record labels—Universal Music Group, Warner Music Group and Sony Music—becoming the first AI startup to secure deals with all three. Since the music industry has generally taken great umbrage over the proliferation of AI music, it was surprising to see the labels sidle up to a little-known newcomer such as Klay.