Major music companies, including Universal Music Group, Warner Music Group, and Sony Music Entertainment, are currently negotiating licensing deals with AI startups Udio and Suno to ensure artists are compensated for their work.

These negotiations come in the wake of copyright infringement lawsuits filed by the Recording Industry Association of America (RIAA) against Udio and Suno, which were initiated in June 2024.

The aim of these licensing agreements is to establish a framework for how AI firms compensate recording artists, addressing ongoing legal disputes over copyright infringement.

This situation underscores the growing intersection of technology and entertainment, as AI continues to evolve and influence music production.

Mitch Glazier, CEO of the RIAA, has stressed the importance of collaboration between the music community and AI developers to foster sustainable practices in the industry.

Both Udio and Suno have defended their practices by citing the 'fair use' doctrine, arguing that their technology creates transformative works rather than mere copies, a claim disputed by the RIAA.

Suno's CEO, Mikey Shulman, stated that their AI is designed to generate new outputs, while the RIAA views this admission as a significant concession regarding the use of copyrighted works.

The ongoing discussions may pave the way for a more collaborative era in AI-generated music, potentially alleviating concerns about unauthorized use of copyrighted material.

Udio has raised $10 million from investors, including Andreessen Horowitz, while Suno secured $125 million in a funding round led by Lightspeed Venture Partners.

If successful, these licensing agreements could allow AI services to legally use music for creating new content, opening new revenue streams for music labels.

Ultimately, the outcome of these negotiations could significantly impact the relationship between traditional music companies and emerging AI technologies.

Last year, the RIAA sought up to $150,000 per infringed work in lawsuits against Udio and Suno, with potential damages totaling billions of dollars.