Universal Music Group (UMGNF) has officially ended its copyright battle with AI music startup Udio. The settlement not only resolves the dispute but also paves the way for a new partnership between the two companies to develop a new AI-driven platform for music creation, expected to launch next year.
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Universal Music is one of the world’s largest music companies, representing top artists, including Taylor Swift and Lady Gaga. In 2024, UMG, along with Sony (SONY) and Warner (WMG), sued Udio and fellow AI platform Suno, accusing them of using copyrighted music without permission to train their AI systems.
UMG, Udio Team Up for Streaming Platform
As part of the settlement agreement, both companies will launch a new subscription-based music platform next year, allowing fans to create songs, remixes, and personalized tracks using licensed music. Meanwhile, Universal artists who grant permission will have their work included, and all user-generated music will remain within the Udio platform.
The service will use generative AI trained solely on authorized content, aiming to give users a safe and legal space to create, stream, and share music while protecting artists’ rights.
The financial details of the settlement were not made public. Nonetheless, Universal Music stated that artists and labels who choose to participate will be paid when their music is used to train Udio’s AI models and again when subscribers use those songs to create new works.
AI Pressure Mounts on Music Labels
The deal with Udio marks a major settlement in the growing clash between AI innovation and creative rights. Major music labels are feeling the pressure from the rapid rise of AI-generated music. These companies are now pushing for clearer regulations and licensing models to protect artists’ rights while embracing new technology.
Earlier this month, the Financial Times reported that Universal Music and Warner Music are nearing AI licensing agreements aimed at managing the growing disruption caused by AI. Sources said the labels aim for these agreements to establish a framework for how AI companies compensate artists for using their music.
Is Universal Music Stock a Buy Today?
Currently, Wall Street has a Moderate Buy consensus rating on UMGNF stock based on four Buys and three Holds assigned over the last three months. The average Universal Music stock price target of $35.52 indicates an upside of 34.20% from the current level.
