AI Music Startups Suno and Udio Seek Music Industry Partnerships After Copyright Battles

The companies that angered the music industry with AI-generated songs now hope to join it through licensing deals.

Published on Feb. 26, 2026

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Suno and Udio, two AI music generation startups, have faced legal battles with major record labels over copyright infringement allegations. After their users flooded the internet with millions of AI-generated songs, the companies are now trying to negotiate with the music industry to secure licensing deals and partnerships. The startups' leaders believe working together with the industry is the only way forward, but many professional musicians remain skeptical about the exploitation of their intellectual property.

Why it matters

The rise of AI-powered music generation has disrupted the traditional music industry, leading to tensions between the technology companies and the artists and labels whose work is being used to train the AI models. The outcome of these negotiations and lawsuits will shape the future of AI's role in music creation and distribution.

The details

Suno and Udio, two AI music generation startups, have faced legal battles with major record labels like Sony, Universal, and Warner over allegations of copyright infringement. The companies were accused of exploiting the recorded works of the labels' artists to train their AI models and generate new music. In response, the startups have been working to strike licensing deals and partnerships with the music industry, recognizing that collaboration is necessary for their technology to be accepted. However, many professional musicians remain skeptical, arguing that the AI music economy is built on the exploitation of their intellectual property without transparency, consent, or payment.

  • In 2024, Sony Music, Universal Music, and Warner Records sued Suno and Udio for copyright infringement.
  • In 2025, Suno struck a settlement with Warner, and Udio signed licensing agreements with Warner, Universal, and independent label Merlin.
  • In 2026, Udio's deal with Universal led to an exodus of frustrated users who were blocked from downloading their own AI-generated tracks.

The players

Suno

An artificial intelligence company that develops technology to generate new music. Suno was co-founded by Mikey Shulman in 2022 and is now valued at $2.45 billion.

Udio

A New York-based AI music generation startup founded in 2023 by a group that included several AI researchers from Google. Udio has signed licensing agreements with Warner, Universal, and independent label Merlin.

Mikey Shulman

The co-founder and CEO of Suno, who has a background in music as a former rock band member.

Andrew Sanchez

The CEO of Udio, who is an opera-loving tenor and has a passion for music.

Tift Merritt

A singer-songwriter and the co-chair of the Artists Rights Alliance, who has helped organize a campaign urging AI companies to pursue licensing deals and partnerships rather than build platforms without regard for copyright law.

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What they’re saying

“Having a close relationship with the music industry is elemental to us. Users really want to have an anchor to their favorite artists. They want to have an anchor to their favorite songs.”

— Andrew Sanchez, CEO, Udio (AP)

“The economy of AI music is built totally on the intellectual property, globally, of musicians everywhere without transparency, consent, or payment. So, I know they value their intellectual property, but ours has been consumed in order to replace us.”

— Tift Merritt, Singer-songwriter and co-chair of the Artists Rights Alliance (AP)

“If you took what we're doing and pretended that the word AI wasn't a part of it, people would be like, 'Oh my gosh. This is so cool.'”

— Andrew Sanchez, CEO, Udio (AP)

What’s next

The lawsuits between the AI music startups and the major record labels are still ongoing in federal courts in Boston and New York. The outcome of these legal battles will be crucial in determining the future relationship between the technology companies and the music industry.

The takeaway

The rise of AI-powered music generation has created a rift between the technology companies and the music industry, with both sides seeking to protect their interests. While the startups believe collaboration is the way forward, many artists remain skeptical about the exploitation of their intellectual property. The resolution of these conflicts will shape the future of AI's role in music creation and distribution.