Major Labels Race To Strike AI Music Deals With Suno, Udio
By Trevor Loucks
Founder & Lead Developer, Dynamoi
Universal, Sony, and Warner are reportedly in parallel settlement talks with AI music generators Suno and Udio, nearly one year after filing landmark copyright lawsuits against the platforms.
The negotiations mark a dramatic shift from litigation to collaboration, with labels pushing for licensing fees and small equity stakes in the AI startups rather than pursuing protracted court battles.
Why it matters:
These talks could establish the licensing blueprint for AI music platforms industry-wide.
Rather than fighting AI technology, major labels are positioning themselves to profit from it through direct ownership stakes and revenue-sharing agreements.
- Strategic pivot: Labels move from blocking AI to controlling it through ownership and licensing.
- Market leverage: Settlement terms will set precedent for negotiations with other AI platforms.
- Discovery costs: Over 50 discovery requests from each side have made litigation expensive and complex.
Between the lines:
The settlement discussions reveal label recognition that outright AI blocking may be futile.
Suno raised $125 million and reached 25 million users despite ongoing litigation. Udio created viral hits like "BBL Drizzy" that dominated social media.
Both platforms maintain their training processes constitute fair use under copyright law—a legal argument experts consider surprisingly strong.
The litigation challenge
Discovery has proven more complex than anticipated, with parties spending months negotiating protocols just to inspect source code and training data.
"Given the complexity of the case, the number of discovery requests at issue—to date, over fifty RFPs from each side—this process has been a complex one," court filings show.
What's at stake:
The settlement framework could reshape how the music industry monetizes AI-generated content.
- Equity stakes give labels ongoing revenue from AI platform growth
- Licensing fees create new revenue streams beyond traditional streaming
- Settlement terms become template for deals with emerging AI platforms
- Labels gain influence over AI development rather than just blocking it
Yes, but:
Settlement talks don't guarantee resolution. Both AI companies remain confident in their fair use defense.
If negotiations fail, the cases could drag on for years and potentially reach the Supreme Court, creating uncertainty for the entire AI industry.
Independent artists worry that major label control over AI platforms could further consolidate power and limit creative opportunities for smaller creators.
What's next:
Industry precedent
Any settlement will immediately trigger licensing discussions with other AI music platforms, from ByteDance's unreleased tools to Meta's experimental audio models.
Artist implications
Musicians will need to navigate a landscape where major labels have financial stakes in the AI platforms generating music that competes with human artists.
The bottom line:
Major labels are choosing ownership over opposition in the AI music revolution.
These settlement talks signal the industry's recognition that AI music generation is inevitable—and profitable partnerships beat protracted legal warfare.
About the Editor
Trevor Loucks is the founder and lead developer of Dynamoi, where he focuses on the convergence of music business strategy and advertising technology. He focuses on applying the latest ad-tech techniques to artist and record label campaigns so they compound downstream music royalty growth.
