Major record labels are in critical discussions with AI music startups Suno and Udio to license their extensive music libraries, a development that could significantly alter the music industry’s approach to artificial intelligence. This move, reported by Bloomberg involves Universal Music Group, Warner Music Group, and Sony Music Entertainment. The talks aim to forge a compensation framework for artists and could also see the labels acquiring small equity stakes in the AI firms.
These negotiations carry substantial weight, potentially resolving the contentious copyright infringement lawsuits filed against Suno and Udio by the Recording Industry Association of America (RIAA) in June 2024.
For the broader music ecosystem, a successful outcome could herald a more collaborative and legally sound era for AI-generated music, addressing widespread concerns about unauthorized use of copyrighted material. However, the discussions are reportedly ongoing and could still face setbacks, according to Bloomberg’s sources.
As of June 1 neither the AI companies nor the major labels have issued official statements regarding these licensing talks.
Clash Over Copyrighted Content
The legal battleground was established in June 2024 when the RIAA, acting for the major labels, initiated legal action against Suno and Udio. The core accusation is the unauthorized ingestion of vast quantities of copyrighted songs to train their AI models.
The RIAA argued these actions constituted clear and large-scale copyright infringement. Ken Doroshow, RIAA’s Chief Legal Officer, stated at the time that the AI firms were attempting to hide the full scope of their infringement and that the lawsuits were necessary to reinforce basic legal and ethical rules for AI development.
Court documents detailed instances where AI-generated music closely resembled works by iconic artists, with one filing claiming “even the biggest Bruce Springsteen fan would have trouble distinguishing between the real “Boss” and the vocals in the Udio outputs “Reveries of the Boss” and “Throne of Stone”.”
In their defense, Suno and Udio invoked the “fair use” doctrine, asserting their technology was transformative, creating entirely new musical pieces rather than mere copies. Suno admitted its AI processed millions of recordings but argued this was permissible.
Udio termed its methods a “quintessential fair use.” Both AI firms also suggested the lawsuits were an anti-competitive tactic by the labels. The RIAA sharply rebuked these arguments, with a spokesperson asserting, “Their large-scale infringement does not qualify as ‘fair use.’ There is nothing fair about appropriating an artist’s work, extracting its essence, and repurposing it to compete with the originals.”
Industry Navigates AI’s New Frontier
The broader music and creative industries have been actively debating AI’s role. Suno’s CEO, Mikey Shulman, previously defended his company’s technology as “transformative” and “designed to generate completely new outputs, not to memorize and regurgitate pre-existing content,” while accusing the labels of employing an “old lawyer-led playbook.” The RIAA had considered the AI firms’ admission of likely using copyrighted works in training a “major concession.”
Concerns over AI’s use of copyrighted material extend globally. In May 2025, a large coalition of UK artists, including Paul McCartney and Elton John, urged their government to mandate transparency from AI companies regarding training data, arguing that “Copyright law is not broken, but you can’t enforce the law if you can’t see the crime taking place.”
This sentiment was echoed by award-winning producer Giles Martin, who stated, “If you make something, if something is yours, it shouldn’t be taken by a company and used without your permission. It’s as simple as that.” However, some, like an opinion piece in Forbes, cautioned that overly strict transparency rules could be technically unworkable.
Alternative paths have been explored by other tech entities. YouTube, for example, was reported in July 2024 to be negotiating licensing deals with record labels for AI training, offering substantial one-time payouts. Google also expanded its Music AI Sandbox in April 2025, emphasizing responsible AI development, though, like many, it has not fully disclosed its training datasets.
This occurred after RIAA Chairman and CEO Mitch Glazier had warned that “unlicensed services like Suno and Udio that claim it’s ‘fair’ to copy an artist’s life’s work… set back the promise of genuinely innovative AI for us all.”
Towards A Licensing Framework?
The current negotiations between the major labels and Suno and Udio, if fruitful, could establish a vital precedent for the AI music sector. They would be a pragmatic, if somewhat surprising, move from the major labels, suggesting they see a path to monetization even with companies they are actively suing.
This potential shift towards licensing reflects a growing recognition of the need for sustainable and equitable solutions as AI technology continues to advance. The discussions about not just fees but also equity suggest the music industry is seeking a more integral and long-term role in the evolving AI music landscape. While the path ahead remains complex, these talks signify a crucial attempt to harmonize technological innovation with the established rights and expectations of music creators.
