AI Music Company Udio Settles Lawsuit With Universal Music Group

Universal Music Group (UMG) and Udio, one of the top AI music models on the market, have announced a strategic agreement, thereby ending UMG’s involvement in the copyright infringement litigation it brought against Udio alongside Sony and Warner last year. A press release from UMG states that the two companies will also “collaborate on an innovative, new commercial music creation, consumption and streaming experience.”

This deal includes a compensatory legal settlement for UMG, which sued Udio and its rival Suno with the two other major music companies in June 2024, accusing the two platforms of copyright infringement on an “almost unimaginable scale.” At the time, Suno and Udio were using UMG and the other majors’ copyrighted sound recordings to train their models, which could make realistic songs at the click of a button, without a license in place. (Sony Music and Warner Music Group are still involved in the lawsuit against Udio and Suno).

According to the press release, this deal goes beyond just settling the lawsuit — it also provides licensing agreements for UMG’s recorded music and publishing assets, creating a new revenue stream for the company and its signees. Notably, UMG’s lawsuit against Udio was only focused on the apparent infringement of UMG’s sound recordings, while today’s agreement provides a licensing framework for not just sound recordings but songs as well. Participating UMG artists and songwriters will be rewarded for both the training process of the AI model and for its outputs, according to a source close to the deal.

For now, Udio’s existing model will remain available for users as the AI company transitions over to this new model with UMG. Any song created with Udio’s existing model will be “controlled within a walled garden,” according to the release, and there are already amendments in place to make sure that all songs created with Udio are fingerprinted, filtered and more. According to a source close to the deal, users are not able to export their Udio songs now.

The new collaborative platform will be launched in 2026, and UMG artists and songwriters can participate in it on an opt-in basis. The press release states it will be “powered by new cutting-edge generative AI technology that will be trained on authorized and licensed music. The new subscription service will transform the user engagement experience, creating a licensed and protected environment to customize, stream and share music responsibly, on the Udio platform.” The source close to the deal adds that users will not be able to export works made within Udio’s forthcoming platform. Instead, users can enjoy their creations within the service, which will be geared towards fans. Some capabilities are said to include mashups, remixes and tempo changes to existing, licensed works as well as voice swapping with UMG artists’ voices who have chosen to make their vocals available to users.

This marks UMG’s latest collaboration with an AI music company and is certainly its biggest announcement on that front to date. In the past few years, UMG has struck deals with “responsible” AI music companies, as the company often calls them, including KLAY, SoundLabs and Pro-Rada. More deals between UMG and AI companies are expected to arrive in the coming days.

“We couldn’t be more thrilled about this collaboration and the opportunity to work alongside UMG to redefine how AI empowers artists and fans,” said Andrew Sanchez, co-founder & CEO of Udio, in a statement. “This moment brings to life everything we’ve been building toward — uniting AI and the music industry in a way that truly champions artists. Together, we’re building the technological and business landscape that will fundamentally expand what’s possible in music creation and engagement.”

Lucian Grainge, chairman and CEO of UMG, said, “These new agreements with Udio demonstrate our commitment to do what’s right by our artists and songwriters, whether that means embracing new technologies, developing new business models, diversifying revenue streams or beyond.  We look forward to working with Andrew who shares our belief that together, we can foster a healthy commercial AI ecosystem in which artists, songwriters, music companies and technology companies can all flourish and create incredible experiences for fans.”