Record labels in talks to license music to AI firms Udio, Suno
[LOS ANGELES] Major music companies are in talks to license their work to artificial intelligence (AI) startups Udio and Suno, deals that would establish a framework for how AI companies compensate recording artists for their work, according to sources familiar with the discussions.
Universal Music Group, Warner Music Group and Sony Music Entertainment are pushing to collect license fees for their work and also receive a small amount of equity in Suno and Udio, two leaders among a crop of companies that use generative AI to help make music. Any deal would help settle lawsuits between the two sides, said the sources, who declined to be identified because the talks could fall apart.
Udio and Suno enable aspiring music creators to type in a prompt that describes a sound or song like 'a modern country ballad about unrequited love' and receive an audio recording in return. The companies must train their software on datasets made up of millions of individual pieces of information. That means a lot of music.
The major music companies sued Udio and Suno last year accusing them of copyright infringement. The Recording Industry Association of America (Riaa), a trade group for record labels, sought as much as US$150,000 per work infringed, which could total billions of US dollars.
The music companies and the AI startups are talking to see if they can agree on terms rather than continue to fight in court. The negotiations are happening in parallel, creating a race of sorts to see which AI company and label will strike a deal first. The talks are complicated because the labels are pushing for greater control over the use of their work, while Udio and Suno are seeking flexibility to experiment and want deals at a price reasonable for startup companies.
Udio and Suno did not respond to requests for comment. The three music companies declined to comment.
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Udio got US$10 million last year from a group of investors that included venture capital firm Andreessen Horowitz, while Suno raised US$125 million in a round that included Lightspeed Venture Partners.
AI companies have battled major media companies over whether they need to pay to train their large language models on copyrighted work. They have argued that the training is covered under fair use, while rights holders say they must be compensated. The New York Times sued OpenAI, which has struck licensing deals with companies such as News Corp, the Associated Press and Vox Media.
The music industry has wrestled with how best to respond to the rise of AI technology. Industry sales have grown over the last decade, but have yet to fully recover from the damage wrought in the early days of the internet, when file sharing sites and piracy decimated sales. Record companies have battled every new technology, from file-sharing to user-generated content to streaming. But streaming services such as Spotify Technology have helped revive the industry.
The industry has expressed a desire to protect its copyrights while also leaning into new technology.
'The music community has embraced AI, and we are already partnering and collaborating with responsible developers to build sustainable AI tools centred on human creativity that put artists and songwriters in charge,' Mitch Glazier, chief executive officer of the Riaa), said when it filed the suit. 'But we can only succeed if developers are willing to work together with us.' BLOOMBERG
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