In response to protests by over 100 artists and performers against military involvement and weapons manufacturing sponsorship, SXSW announced a revision of its sponsorship model, dropping the U.S. Army and associated defense companies for the 2025 event.

Over 80 performers and speakers have withdrawn from the SXSW festival in protest of its U.S. Army sponsorship. Critics argue that accepting military sponsorship signals complicity with authoritarian, militaristic agendas, and the decision has sparked significant controversy within the arts community.

During the 2024 SXSW festival, dozens of bands and panelists withdrew their participation in protest of the festival’s ties to the U.S. Army and defense companies. The decision to keep these sponsors, despite calls from groups like the Austin for Palestine Coalition and other labor and artistic organizations, has raised significant ethical and political concerns.

SXSW sent a cease-and-desist letter to the Austin for Palestine Coalition, alleging trademark and copyright infringement as a means to silence critics. The move has been widely criticized as an attempt to suppress political dissent and free expression.

More than 60 bands canceled their appearances at SXSW in protest of the festival's military sponsorships and associations with companies tied to defense contractors, which are linked to supplying weapons used in the conflict in Gaza. The controversy also prompted a reaction from Texas Governor Greg Abbott, while SXSW stated it respects diverse viewpoints.

SXSW is facing criticism and boycott from artists for partnering with defense industry sponsors such as the U.S. Army and RTX (formerly Raytheon), whose ties to the war in Gaza have raised ethical concerns. Critics argue that the festival’s decision to embrace these sponsors signals a dangerous alignment with entities that profit from conflict, undermining its original creative and progressive ethos.

Union organizers for musicians held a rally outside the Austin Convention Center on March 16, 2023 to protest SXSW's low artist payment practices, demanding increased compensation for performers and fairer treatment of creative workers.

Musicians and union organizers held a rally at the Austin Convention Center on March 16, 2023, demanding better pay and fair compensation for artists performing at SXSW. The protest highlighted a stark disparity between high application fees collected and the low payouts offered to artists. In response, a SXSW representative disputed the figures and stated that a policy review would follow the event.

Union organizers from the Union of Musicians and Allied Workers held a demonstration outside the Austin Convention Center on March 16, 2023, protesting SXSW's low payment for artists. The protest, which included calls for an increase in artist compensation and elimination of performance application fees, underscores concerns about the exploitation of musicians and has drawn support from local City Council members. In response, a SXSW spokesperson stated that the festival would review its payment policies after the event.

On March 16, 2023, a rally at the Austin Convention Center saw over 2,300 musicians and union representatives demanding fairer pay from SXSW. Criticism was directed at the festival's compensation model, where nominal fees and rising application costs starkly contrast with the significant economic benefits generated for Austin.

Over 120 musicians, represented by the Union of Musicians and Allied Workers (UMAW), signed an open letter demanding higher guaranteed payments and the removal of application fees at SXSW. The letter criticizes the longstanding 'play-for-exposure' model, where artists are offered only $250 for bands and $100 for solo acts, a rate that has not changed in over a decade despite rising costs.