Universal Music Group and AI music firm Udio settle lawsuit and announce new music platform

A new step has been taken in the tumultuous relationship between artificial intelligence and the music industry.

Universal Music Group and AI song generation platform Udio have reached a settlement in a copyright infringement lawsuit and have agreed to collaborate on new music creation, the two companies said in a joint statement.

Universal and Udio say they have reached “a compensatory legal settlement” as well as new licence deals for recorded music and publishing that “will provide further revenue opportunities for UMG artists and songwriters.” Financial terms of the settlement haven't been disclosed.

Major record labels Universal, Sony Music Entertainment and Warner Records sued Udio and another AI song generator, Suno, last year over copyright infringement.

The suit alleged that specific AI-generated songs made on Udio closely resembled Universal-owned classics like Frank Sinatra’s “My Way” and The Temptations’ “My Girl.”

It was filed just weeks after more than 200 artists signed an open letter calling for the “predatory” use of AI in the music industry to be stopped.

Universal CEO Lucian Grainge said “these new agreements with Udio demonstrate our commitment to do what’s right by our artists and songwriters.”

Mix 'n' match

The two companies have also agreed to launch a new AI-powered music creation platform in 2026. The feature should allow users to remix and mash up their favourite songs with AI, and possibly create new music in an artist’s distinct style.

Universal artists, which include Taylor Swift, Kendrick Lamar, Ariana Grande and Billie Eilish, will be able to give permission for how their music can be used, Udio CEO Andrew Sanchez said in a statement. Participating artists will receive financial compensation.

These AI-powered creations will however be unavailable to download. AI songs made on Udio will be “controlled within a walled garden” as part of the transition to the new service, the two companies said in their joint announcement.

This collaborative deal is the first its kind in the ongoing power struggle between AI companies and the music industry.

Earlier this month, streaming platform Spotify said it was teaming up with Universal and Warner music groups to develop “responsible AI products” but gave no additional details.

The rise of AI tools has fuelled debate over the technology’s role in music while raising fears about “AI slop” — automatically generated, low-quality, mass-produced content — highlighted by the rise of fictitious bands passing for real artists.

About 30,000 new AI-generated songs are released each day on Deezer, the streaming platform said in September.