Music AI Companies Try to Make Peace After Industry Lawsuits

Two artificial intelligence companies that create music from text prompts are working to repair relationships with record labels after facing major copyright lawsuits. Suno and Udio have begun settling with some music industry giants, though many artists remain concerned about AI replacing human creativity.

CAMBRIDGE, Mass. — Inside a converted 19th-century building in Cambridge, Massachusetts, Suno’s CEO Mikey Shulman watches as his team creates music without touching a single instrument. A researcher types descriptive terms like “Afrobeat, flute, drums, 90 beats per minute” into their artificial intelligence platform, and within moments, an engaging rhythm fills the office space.

This technology, which allows anyone to generate songs by simply describing what they want to hear, has sparked a heated battle between AI startups and the music industry. Companies like Suno and its competitor Udio have made it possible for users with zero musical training to create tracks inspired by virtually any musical style or tradition.

The controversy stems from how these AI systems learn — by analyzing existing music to create new synthetic versions. This process has infuriated music industry executives and triggered significant legal action against both startups.

Following the release of millions of AI-generated songs by users, some of which appeared on platforms like Spotify, executives from Cambridge-based Suno and New York’s Udio are now attempting to broker peace with record companies they once battled in court.

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

The legal confrontation began in 2024 when Sony Music, Universal Music and Warner Records filed copyright infringement lawsuits against both companies, claiming they illegally used their artists’ recorded material.

Since those initial lawsuits, both startups have worked to mend fences with the industry. Suno, which now carries a $2.45 billion valuation, reached a settlement agreement with Warner last year. Udio has secured licensing deals with Warner, Universal and independent label Merlin. Sony remains the only major label that hasn’t settled with either company as litigation continues in Boston and New York federal courts.

The initial settlement between Udio and Universal created backlash from users who lost access to download their own AI-created tracks. However, Udio CEO Andrew Sanchez remains hopeful about future developments as his company modifies its approach to allow fans to experiment with AI using works from consenting artists.

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

Many working musicians remain doubtful about these developments. Singer-songwriter Tift Merritt, who serves as co-chair of the Artists Rights Alliance, recently helped launch a “Stealing Isn’t Innovation” campaign. The initiative, supported by artists including Cyndi Lauper and Bonnie Raitt, pushes AI companies to pursue proper licensing agreements instead of building platforms that ignore copyright protections.

“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,” Merritt said during an interview in Raleigh, North Carolina.

Shulman argues that technology “evolves very often faster than the law,” and his company attempts to be thoughtful about “not breaking the law” while also working to “deliver products that the world really wants.”

When the music industry initially challenged Suno over alleged copyright violations, the company’s confrontational response alienated professionals like Merritt.

A particularly divisive moment occurred last year when Shulman was quoted saying “it’s not really enjoyable” to make music most of the time. Despite learning piano at age 4 and later playing bass guitar in rock bands through high school and college, his comments sparked outrage.

“You need to get really good at an instrument or really good at a piece of production software,” Shulman said on “The Twenty Minute VC” podcast. “I think the majority of people don’t enjoy the majority of the time they spend making music.”

“Clearly, I wish I had said different words,” Shulman told the Associated Press. He explained the context was that “to produce perfect music takes a lot of repetitions and not all of those minutes are the most enjoyable bits of making music. On the whole, obviously, music is amazing. I play music every day for fun.”

Sanchez, Udio’s CEO, also wants people to understand his passion for music. The opera-loving tenor has performed in choirs and grew up singing Luciano Pavarotti songs in his Buffalo, New York family home.

Established in 2023 by former Google AI researchers, Udio now employs approximately 25 people. With fewer users and less funding than Suno, the company has reduced bargaining power in record label negotiations.

Similar to how ride-sharing company Lyft positioned itself as a friendlier alternative to Uber’s aggressive tactics years ago, Udio welcomes its underdog position.

“So many tech companies actively cultivate this I-am-a-tech-company-crusader and that’s part of their identity,” Sanchez explained. “That alienates people who are creative and I am uniformly opposed to that.”

Sanchez acknowledges that not every artist will welcome AI technology, but hopes those who meet with him recognize he’s not promoting “AI bravado.”

“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.'”

In Philadelphia, Mississippi, Christopher “Topher” Townsend operates as a one-person music production company from his basement office, creating Billboard-charting gospel music without singing a note himself.

The rapper, whose lyrics reflect conservative political views, began using Suno in October and quickly created Solomon Ray, a fictional vocalist he describes as an extension of himself.

Townsend employs ChatGPT for lyric writing, Suno for song generation, and additional AI tools for cover art and promotional videos under the Solomon Ray brand.

“I can see why artists would be afraid,” Townsend acknowledged. “(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 music production and engineering professor at Boston’s Berklee College of Music, works to address those concerns among aspiring artists by presenting generative AI as another creative 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 explained.

This optimistic outlook remains difficult to accept for artists who believe their work has been exploited. Merritt expresses particular concern about record labels making AI company deals that exclude independent artists.

While neither Sanchez nor Shulman received Grammy Awards invitations in February, both spent time networking at events surrounding the ceremony.

“I think AI music is still officially not allowed, and my hope is that some of these rules change over the next year, and then maybe the 2027 Grammys, I’ll get an invite,” Shulman said.