Legal Tensions
Major record labels—Universal Music Group (UMG), Sony Music, and Warner Music—are actively negotiating licensing agreements with AI startups like Suno and Udio. These discussions aim to regulate the use of copyrighted music in training generative AI models, ensuring artists and labels receive compensation when AI generates new content based on existing music. The labels are advocating for advanced fingerprinting and attribution technologies, similar to YouTube’s Content ID, to monitor song usage and seeking involvement in the development of AI-generated music tools .
This move reflects a broader trend of media industries negotiating with tech firms to safeguard copyrights and secure revenue streams in the face of AI advancements. The Recording Industry Association of America (RIAA) previously sued Suno and Udio for copyright infringement, though the startups claim their models generate original content without replicating copyrighted material. The negotiations, influenced by regulatory uncertainty and investment pressure, may conclude with licensing deals that include financial settlements and ownership stakes for the labels. Additionally, the labels want to enable artists to opt out of certain uses to respect their preferences .
In parallel, investors are backing startups that facilitate copyright deals between AI companies and content creators. Companies such as Pip Labs, Vermillio, Created by Humans, ProRata, Narrativ, and Human Native have raised a combined $215 million since 2022 to develop platforms that enable legal and paid content sharing. These platforms appeal to AI firms seeking high-quality, legally compliant training data to avoid lawsuits and regulatory penalties. Vermillio projects the AI licensing market will grow from $10 billion in 2025 to $67.5 billion by 2030 .
However, challenges remain, including assembling quality datasets, ensuring legality and ethical use, and convincing creators of the benefits. Legal pressures continue globally, such as in the U.S. and EU, pushing companies to find feasible licensing alternatives. Pip Labs and Stability AI are exploring blockchain and proprietary marketplaces to address these issues. Nonetheless, skepticism persists among creatives about the fairness and impact of licensing their work for AI use .
These developments indicate a significant shift in the music industry’s approach to AI, balancing innovation with the protection of artists’ rights and interests.
