The collision between copyright law and generative artificial intelligence has officially entered its procedural attrition phase. As major record labels attempt to retroactively quantify the exact volume of intellectual property used to train modern music models, federal courts are signaling a reluctance to let existing lawsuits balloon into unmanageable tech industry audits.
This tension is putting a spotlight on how legacy catalog owners protect their assets. The outcome of these structural skirmishes will determine whether AI training liabilities are resolved through multi-billion-dollar court battles or structured corporate licensing deals.
TL;DR: U.S. District Judge Alvin K. Hellerstein blocked Sony Music’s attempt to add 30,442 recordings to its lawsuit against AI platform Udio. By capping the case at 333 original works, the ruling severely limits Udio’s financial liability and underscores the growing procedural hurdles facing music publishers.
Why did the court block Sony Music’s expansion?
The ruling boils down to a matter of judicial scheduling and procedural fairness. On July 2, 2026, Judge Hellerstein signed an order in the Southern District of New York denying Sony’s motion for leave to amend its initial complaint. Sony had originally filed its expansion motion on May 22, 2026, after using audio fingerprinting software to map its catalog against the AI developer’s infrastructure.
The court determined that introducing tens of thousands of new claims so late in the litigation process would break the existing discovery timeline. Adding massive amounts of data requires months of additional technical review. The judge ruled that the late-stage addition would materially alter the scope of the ongoing legal proceedings.
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The multi-billion-dollar shift in financial exposure
The decision fundamentally alters the financial mechanics of the lawsuit. Under current U.S. copyright law, statutory damages for willful infringement max out at $150,000 per work. By restricting the active litigation to the 333 original works listed in the initial filing, the court effectively capped Udio’s statutory damage exposure at roughly $50 million.
Had the court allowed the inclusion of the additional 30,442 tracks, the theoretical liability would have scaled past $4.5 billion. This massive discrepancy changes the leverage dynamics between the two parties. Smaller tech firms can be completely wiped out by massive financial threats. A $50 million ceiling is a risk a well-funded AI platform can realistically manage or fight through a full trial.
Sony stands alone as the major label alliance fractures
This procedural setback occurs against the backdrop of a broader structural split within the music business. When the litigation against Uncharted Labs, the company behind Udio, originally launched in June 2024, it was a unified front led by the RIAA. That solidarity has completely dissolved over the last year.
Universal Music Group formally settled its claims and exited the lawsuit in October 2025. Shortly after, Warner Music Group followed the exact same path by settling its dispute in November 2025. Both conglomerates chose to pivot from legal adversaries to commercial partners. They signed licensing agreements to build authorized AI platforms, leaving Sony Music to fight the fair use battle entirely on its own.
What happens next in the AI music copyright fight?
The legal battlefront is now divided into two distinct strategies. Sony continues to pursue a definitive legal precedent in New York, aiming to prove that backend data ingestion without a license is copyright infringement. The label argues that utilizing open-source tools like yt-dlp to scrape data violates their distribution rights. Udio remains firm in its stance, countering that its training processes constitute transformative fair use.
Meanwhile, a parallel industry conflict is playing out in a Massachusetts federal court. In that venue, Sony and UMG are jointly trying to add 61,026 recordings to an ongoing lawsuit against rival AI platform Suno. Because that case is operating under a different judge and timeline, the industry may see two completely conflicting rulings on catalog expansion before the year ends.
Sources & Further reading
- Music Business Worldwide: On July 2, 2026, U.S. District Judge Alvin K. Hellerstein officially denied Sony Music Entertainment’s motion to expand its copyright infringement lawsuit against generative AI music developer Udio.
- The AI Musicpreneur: The federal court’s denial forces the ongoing lawsuit to remain restricted to the 333 original sound recordings named in the initial filing, rather than the 30,442 tracks Sony sought to add.
- Sher Tremonte: On April 15, 2026, Judge Hellerstein denied Udio’s motion to dismiss Sony’s separate claim regarding the Digital Millennium Copyright Act (DMCA), ruling that the label plausibly alleged Udio illegally bypassed YouTube’s “rolling cipher” access controls to pull music.
