Universal Music Group settles with AI music startup Udio

Universal Music Group said Wednesday it has entered into licensing deals with artificial intelligence music startup Udio, settling a lawsuit accusing Udio of using copyrighted music to train its AI.

Users create music using Udio’s AI, which can compose original songs, including vocals and instruments, from text prompts.

Udio has agreed with UMG to launch a new platform next year that is uniquely trained in “authorized and licensed music” and will allow users to personalize, stream and share music.

“These new agreements with Udio demonstrate our commitment to doing what’s right for our artists and songwriters, whether that means adopting new technologies, developing new business models, diversifying revenue streams or beyond,” Lucian Grainge, UMG’s chairman and CEO, said in a statement.

Udio declined to disclose the financial terms of the settlement and licensing agreements. UMG did not immediately respond to a request for comment on the terms.

Artificial intelligence has brought new opportunities as well as challenges to the entertainment industry as AI startups have trained their models on information available on the Internet, which entertainment companies believe infringes on their copyrighted works.

In the music industry, music companies have accused New York-based Udio and other AI music startups of training on copyrighted music to generate new songs based on popular hits without compensation or permission.

UMG, Sony Music Entertainment, Warner Music Group and other music companies sued Udio last year. In the lawsuit, Udio was accused of using hits like The Temptations’ “My Girl” to create a similar tune called “Sunshine Melody.” UMG owns the copyright to “My Girl”.

“A comparison of a section of the Udio-generated file and ‘My Girl’ reflects a number of similarities, including a very similar melody, the same chords, and very similar backing vocals,” according to the lawsuit. “These similarities are also reflected in the side-by-side transcriptions of the musical scores from the Udio file and the original recording.”

Udio said on its website at the time that it stood by its technology and that its AI model learned from examples, the same way students listen to music and study sheet music.

“The purpose of model training is to develop an understanding of musical ideas – the basic elements of musical expression that belong to no one person,” Udio had said in a statement. “We are absolutely not interested in replicating the content of our training set.”

On Wednesday, Udio CEO and co-founder Andrew Sanchez said he was excited about the opportunity to work with UMG “to redefine how AI empowers artists and fans.”

This collaboration is the first music licensing deal that Udio has entered into with a major music label.

“This moment brings to life everything we’ve built: uniting AI and the music industry in a way that truly champions artists,” Sanchez said in a statement. “Together we are building the technology and business landscape that will fundamentally expand what is possible in music creation and engagement.”

Udio said artists can join the new platform and will be paid, but declined to go into detail or about the artists involved.

Udio, launching in 2024, was co-founded by former Google DeepMind employees. Udio’s backers include music artist will.i.am, Instagram co-founder and Anthropic chief product officer Mike Krieger, and venture capital firm Andreessen Horowitz.

Udio said millions of people have used Udio since its launch in 2024. Users can access the platform through its app or website. The company did not specify the number of downloads or users of its website.

Udio has seen 128,000 app downloads on Apple’s App Store since its app was released in May, according to estimates from New York-based mobile analytics firm Appfigures.

On Thursday, UMG also announced a partnership with London-based Stability AI to develop AI-powered music creation tools for artists, producers and songwriters.