Universal Music Group reaches settlement with AI firm Udio

Universal Music Group (UMG) has settled its high-profile copyright infringement lawsuit with artificial intelligence company Udio, paving the way for a new partnership between the two firms to develop AI-powered music products.

Under the terms of the agreement, UMG and Udio will jointly launch a platform next year that uses generative AI trained exclusively on authorised and licensed music, marking a significant shift from confrontation to collaboration between the music industry and emerging AI firms.

UMG Chairman Sir Lucian Grainge said the deal underscores the company’s commitment to balancing innovation with artist protection. Grainge said that these agreements demonstrate our commitment to do what’s right by our artists and songwriters, whether that means embracing new technologies, developing new business models or diversifying revenue streams or beyond, as reported by Reuters.

Udio CEO Andrew Sanchez echoed the sentiment, stating that the partnership aims to build the technological and business landscape that will fundamentally expand what’s possible in music creation and engagement.

The settlement comes months after UMG, alongside Sony Music and Warner Records, filed lawsuits in 2024 accusing Udio and another AI firm, Suno, of mass copyright infringement. The labels alleged that the companies copied hundreds of songs from major artists — including Taylor Swift, BTS, Ariana Grande, Sabrina Carpenter and Lady Gaga — to train their music-generating AI systems, which they claimed could “directly compete with, cheapen, and ultimately drown out” human artistry, as per the Reuters report.

Udio and Suno had argued that their use of copyrighted recordings for training fell under fair use provisions of U.S. copyright law, describing the lawsuits as attempts by major labels to stifle innovation and competition.

While UMG has now reached an agreement with Udio, Sony and Warner’s lawsuits against the firm remain ongoing, as do all three labels’ cases against Suno.

The settlement signals a possible shift in the music industry’s approach to artificial intelligence — from legal opposition to structured collaboration — as labels and AI firms increasingly explore how to blend creativity, ethics and technology in the evolving world of music production.