Flashspoter - Warner Music Group (WMG) is supporting its standing in the middle of a massive music industry transformation through the court victory in the copyright dispute with the AI-based music startup, Udio. The agreement comes after the licensing contract for a generative music-making service that will be launched in 2026. The deal marks a strategic shift from a legal approach toward collaboration in an era when AI technologies are increasingly influencing the creative process and music distribution.
In its official release, WMG explains that the new service created by Udio will use a generative AI model fully trained with a catalog of licensed and authorized music. The system aims to facilitate the use of creative works in a way that is not only legally compliant but also provides fair remuneration to the rights holders. In this platform-oriented offering, consumers will have the opportunity to generate a new version of a track, record a cover, or simply make fresh compositions that feature the use of a) vocals b) musical works by the artists who have decided to join the initiative. All usages will be assigned with proper recognition and money transfer procedures that have been calibrated.
The deal also closes a lawsuit filed by WMG in 2024 related to the use of recorded material without permission in the process of training AI models. The case was previously part of a series of major lawsuits filed by WMG, Universal Music Group (UMG), and Sony Music Entertainment against Udio and Suno. However, in recent months, the three major labels have tended to turn to negotiations and licensing arrangements as a solution considered more effective.
The Udio, as part of the launch preparations, is reportedly designing a broader protection system to set limits on the use of licensed works. The Platform will continue to operate in a closed ecosystem, ensuring that content created by users cannot be freely downloaded, in accordance with the agreed terms of cooperation.
In addition to the agreement with Udio, WMG also announced a separate deal with UMG and Sony with Klay Vision, a Los Angeles-based startup that is developing large-scale music models containing licensed data. Klay is focused on building an AI framework designed to support new music experiences, abide by creator rights, and preserve the commercial value of works.
The label collaborations follow the increase of artificial music content on different streaming services. A considerable number of AI-made songs have reached the top charts, thus the viral phenomenon of virtual artists and bands that have attracted millions of listeners without a single live show has been created. Such a state of affairs makes major labels eager to find new monitoring tools to prevent generative tech from evolving without proper supervision. With the licensing agreement in place, the labels aim to coexist the tech breakthrough with the safeguarding of the human creative side.
In the financial markets, the reaction to this development looks mixed. Sony shares fell about 2.3 percent, while WMG lost 2 percent and UMG fell 0.3 percent in midday trading. This move shows that investors are still monitoring the uncertainty surrounding the transformation of the music sector which is now closely related to the development of AI technology.
However, AI startup investors are showing much greater optimism. On the very same day, Suno made public a US $ 250 million Series C round of funding that was mainly contributed by Menlo Ventures. NVentures and a few other major investors were also involved in this round. The company is now valued at $ 2.45 billion, which is an indication of a high level of market trust in the future of AI-based music-making technology.
The worldwide music market is gradually heading to a significant change stage with an increasing number of licensing deals and new frameworks being initiated. The steps of WMG, UMG, and Sony indicate that control, copyright protection, and technological partnership will be the main pillars for a rising volume of innovations.
source TechCrunch, Engadget, Al Jazeera
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