AI music licensing talks have moved to center stage for Suno and Udio. Both companies want agreements with record labels after a period of conflict. Their tools let users generate songs through text prompts and edits. Some output has spread widely online and reached streaming services like Spotify.
At Suno’s headquarters in Cambridge, Massachusetts, executives describe a workflow that resembles a studio session. A research scientist can assemble a track using typed prompts such as genre and tempo. The AP described a session using “Afrobeat” and 90 beats-per-minute prompts. The company says the product lowers barriers for non-musicians.
That simplicity has also sharpened a central dispute. Music companies argue that these systems were trained using copyrighted recordings. The startups say they are building consumer tools people want. The legal and commercial outcomes could shape future pricing for generative music.
Lawsuits And Deals Redraw The Risk Map
The major label groups sued both startups for copyright infringement in 2024. The plaintiffs include Sony Music, Universal Music, and Warner Records. The lawsuits allege exploitation of artists’ recorded works. The cases are moving through federal courts in Boston and New York.
Both companies have shifted toward settlement and licensing. Suno is valued at $2.45 billion and reached a settlement with Warner last year. Udio signed licensing agreements with Warner, Universal, and independent label group Merlin. The report said Sony has not settled with either startup.
The legal exposure is not limited to the United States. Suno also faces challenges in Europe from groups representing music creators. Those disputes add complexity for companies trying to operate globally. Investors often watch how cross-border claims affect compliance spending.
Product Changes Trigger User Backlash
The first deal, between Udio and Universal, produced immediate friction with users. An exodus of frustrated users after some were blocked from downloading their own AI-generated tracks. That reaction highlighted the tradeoffs between rights compliance and user expectations. It also showed how licensing terms can affect product features.
Andrew Sanchez, Udio’s chief executive, said closer ties with the industry are essential. He stated that users want an anchor to their favorite artists and songs. He said the company plans to adapt its business model. The goal is to let fans of willing artists use AI to play with works.
Udio is smaller than its rival; it was founded in 2023 by a group that included AI researchers from Google. The startup employs about 25 people, according to the AP report.
Musicians And Advocates Challenge The Terms
Many musicians remain wary of generative music platforms. Tift Merritt, co-chair of the Artists Rights Alliance, helped organize a “Stealing Isn’t Innovation” campaign. The effort included artists such as Cyndi Lauper and Bonnie Raitt. The campaign urged licensing and partnerships over unlicensed development.
Merritt argued that the economics rely on creators’ intellectual property without transparency or payment. She made those comments in an interview in Raleigh, North Carolina. She also said she worries about label deals that exclude independent artists. An open letter she co-signed described Suno as a “smash and grab” business.
Suno’s leadership has sought to soften earlier rhetoric and emphasize cooperation. Mikey Shulman, who co-founded Suno in 2022, said partnership is the only workable route. He also said technology often moves faster than the law, while stressing a desire not to break it. On “The Twenty Minute VC,” he drew criticism for comments about making music.
