AI Music Startups Seek Harmony with Industry After Copyright Clashes

In a bright 19th-century office building in Cambridge, Massachusetts, Suno CEO Mikey Shulman watches as a research scientist crafts a new song without touching an instrument. With just a few descriptive words—”Afrobeat, flute, drums, 90 beats per minute”—an infectious rhythm fills the room, showcasing the seemingly magical capabilities of AI-generated music.

Much like the early wonder of ChatGPT or AI image generators, platforms like Suno and its rival Udio make music creation accessible to anyone, regardless of musical training or talent. But this technological marvel has come at a cost: significant legal battles with an industry that sees these startups as exploiting artists’ works without permission.

“We have always thought that working together with the music industry instead of against the music industry is the only way that this works,” says Shulman, who co-founded Suno in 2022. “Music is so culturally important that it doesn’t make sense to have an AI world and a non-AI world of music.”

The music industry’s major players responded with legal force. Sony Music, Universal Music, and Warner Records sued both startups for copyright infringement in 2024, alleging unauthorized use of recorded works to train their AI models.

Since then, both companies have worked to make peace. Suno, now valued at $2.45 billion, settled with Warner last year. Udio has gone further, signing licensing agreements with Warner, Universal, and independent label Merlin. Only Sony has not settled with either startup as lawsuits continue in Boston and New York federal courts. Suno also faces additional legal challenges in Europe from groups representing music creators.

The first settlement between Udio and Universal triggered backlash when users discovered they were suddenly blocked from downloading their own AI-generated tracks. Despite this rocky transition, Udio CEO Andrew Sanchez remains optimistic about adapting his company’s business model to work with willing artists.

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

Many professional musicians remain deeply skeptical. Singer-songwriter Tift Merritt, co-chair of the Artists Rights Alliance, recently helped organize a “Stealing Isn’t Innovation” campaign endorsed by prominent artists including Cyndi Lauper and Bonnie Raitt. The initiative urges AI companies to pursue proper licensing rather than building platforms that disregard copyright law.

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

Shulman acknowledges technology often outpaces legal frameworks but argues his company strives to “not break the law” while still delivering products consumers want.

Suno’s early antagonistic stance toward the music industry created additional friction. A particularly damaging moment came when Shulman was quoted saying “it’s not really enjoyable” to make music most of the time—a comment he now regrets.

“Clearly, I wish I had said different words,” Shulman told the AP, explaining he was referring to the repetitive aspects of music production, not the overall creative experience. “On the whole, obviously, music is amazing. I play music every day for fun.”

Udio’s Sanchez, himself an opera-loving tenor who grew up admiring Luciano Pavarotti, positions his company as a more industry-friendly alternative. Founded in 2023 by former Google AI researchers, Udio employs about 25 people and has raised less venture capital than Suno.

Copyright lawyer Brandon Butler suggests this funding disparity likely influenced Udio’s strategy. “A service that gets more venture backing is in some sense hungrier to find revenue streams and more on the hook to all those backers to make sure that they achieve profitability, which would make settling and compromising less attractive,” said Butler, director of copyright advocacy group Re:Create.

Sanchez distances himself from what he sees as typical tech industry arrogance. “So many tech companies actively cultivate this I-am-a-tech-company-crusader and that’s part of their identity,” he said. “That alienates people who are creative and I am uniformly opposed to that.”

Some creators already see potential in AI-assisted music. Christopher “Topher” Townsend, a conservative rapper from Philadelphia, Mississippi, uses Suno alongside other AI tools to create and market chart-topping gospel music under the fictional persona Solomon Ray.

“I can see why artists would be afraid,” Townsend said. “(Solomon Ray) has an immaculate voice. He doesn’t get sick. You know, he doesn’t have to take leave, he doesn’t get injured and he can work faster than I can work.”

Jonathan Wyner, a professor at Berklee College of Music in Boston, views generative AI as simply another tool. “To the creative musician, AI represents both enormous potential benefits in terms of streamlining things and frankly making kinds of music-making possible that weren’t possible before, and making it more accessible to people who want to make music,” he said.

Nevertheless, established artists remain concerned, particularly about deals that exclude independent musicians. An open letter co-signed by Merritt this week specifically targets Suno as a “smash and grab” business that artists should avoid.

As these startups continue navigating their complex relationship with the music industry, the future of AI-generated music depends on finding an approach that respects artists’ rights while embracing new creative possibilities.