Universal Music Group (UMG) announced Wednesday that it has settled a copyright lawsuit with AI music startup Udio, paving the way for a new collaboration in music creation.
The two companies plan to launch a generative AI platform next year, which will use licensed and authorized music from Universal's artists to power its system.
According to Yahoo, UMG Chairman Sir Lucian Grainge emphasized the importance of protecting artists and songwriters while embracing new technology.
"These new agreements with Udio demonstrate our commitment to do what's right by our artists and songwriters," Grainge said.
"Working with Udio, we can foster a healthy commercial AI ecosystem in which artists, songwriters, music companies and technology companies can all flourish and create incredible experiences for fans."
Udio CEO Andrew Sanchez added that the collaboration will expand creative possibilities in music.
"We are building the technological and business landscape that will fundamentally expand what's possible in music creation and engagement," he said.
The legal dispute began in 2024, when UMG, Sony Music, and Warner Records filed lawsuits against Udio and another AI company, Suno.
The labels accused the startups of copying hundreds of copyrighted recordings to train their AI systems.
According to the labels, this practice allowed the AI to generate music that could compete with human artists, potentially harming both creators and the industry.
Udio and Suno argued that using copyrighted sound recordings for AI training qualifies as fair use under US copyright law and described the lawsuits as attempts to limit independent competition.
Universal Music have settled their lawsuit with Udio.
— Ed Newton-Rex (@ednewtonrex) October 30, 2025
From the little that is known about the settlement, this looks like a big win for creatives:
- Udio immediately turned off downloads, and apparently will transition to a closed ecosystem where you can remix artists’ songs… pic.twitter.com/TdarU3nmt8
UMG, Udio Settle Copyright Dispute
Under the new agreement, Udio will launch a subscription-based AI music platform next year, allowing fans to customize, stream, and share music responsibly.
The platform will operate with strict controls, including fingerprinting and filtering, to ensure licensed content is used appropriately.
UMG artists, which include Taylor Swift, BTS, Ariana Grande, and Lady Gaga, will receive compensation through the settlement, Reuters reported.
The new license agreements are expected to create additional revenue opportunities for songwriters and performers while offering fans an innovative music experience.
Despite the settlement with Udio, legal cases involving Sony, Warner, and Suno remain ongoing.
UMG's collaboration with Udio represents one of the first major partnerships between a top music label and an AI company following high-profile copyright clashes in the industry.
Financial details of the settlement were not disclosed. Until the new platform launches, Udio's current service will remain available, though content will be monitored closely to ensure compliance with licensing agreements.
Originally published on vcpost.com
