Warner Music Group sued Udio for copyright infringement in 2024. Now they’re partners. This isn’t a plot twist; it’s how major labels kill technologies they can’t control.
On November 19, 2025, Warner settled its lawsuit and struck a licensing deal with Udio, the AI music generator that lets anyone create tracks by typing descriptions. The company insisted the deal would “create new revenue streams for artists and songwriters.” Translation: Warner realized litigation was too slow and expensive, so it pivoted to extracting licensing fees instead. 1
The move follows Universal Music Group’s October settlement with Udio, establishing a pattern. When you can’t beat AI companies, you join them. When you join them, you get paid.
What Actually Happened
Here’s what you need to know. Udio trained its AI models on copyrighted music without permission. Warner, Universal, and Sony sued. Udio kept operating anyway. Then Universal and Warner got tired of fighting and worked out deals for a licensed platform launching in 2026.
Suno AI Just Hit a $2 Billion Valuation While Getting Sued for Music Piracy
Sony hasn’t settled. They’re still suing both Udio and Suno, the other major AI music generator. This matters because it leaves an exit door open—proving litigation still works if you commit resources to it.
The 2026 Udio platform won’t work like the current version. No downloads. Users create songs but can’t export them; everything stays locked in Udio’s system. It’s a walled garden disguised as collaboration.
The Artist Opt-In Problem
Warner says artists get to choose whether their voices and music join the AI training data. Opt-in participation. Sounds protective, right?
The Music Artists Coalition says otherwise. Within 24 hours of Universal’s deal announcement, the organization published a statement demanding three things: transparency on revenue splits, proof that artists receive fair compensation, and real consent—not just permission.
“Participation without fair compensation isn’t partnership,” said Ron Gubitz, the Music Artists Coalition’s executive director. He’s asking questions nobody has answered: What percentage of licensing money actually reaches artists? Will labels deduct settlement payments from artists’ unrecouped balances, reducing what they earn from the AI deal?
Opt-in systems sound good in theory. In practice, they don’t work. Fair Training’s analysis of voluntary opt-out programs showed most people don’t know the option exists, and those who do often don’t know how to execute it. If opt-out doesn’t work, opt-in won’t either—especially when labels have financial incentive to assume participation by default.
What Creators Actually Lost
Udio disabled downloads in early November after the Universal settlement. Users who built songs on the platform suddenly couldn’t export their work. The company gave them 48 hours to download before permanently blocking access.
On Reddit, subscribers said they felt betrayed. One user: “Udio struck a deal that ultimately betrayed their subscribers.” This is the practical implication of licensing deals. Artists’ tools become corporate walled gardens overnight. 2
The 2026 platform offers nothing new. Users will generate remixes and covers of participating artists’ work, but they can’t own what they create. Everything streams within Udio. Everything benefits the label.
The Economics
Streaming platforms will eventually pay below-minimum rates for AI-generated tracks used as filler music—the playlist padding between major releases. This is already happening with Spotify’s algorithmic playlists. 3
A December 2024 CISAC study predicted AI could cost music creators 24% of their revenue by 2028. That’s €10 billion in losses over five years. The same study forecasts AI-generated content will hit 20% of streaming revenue and 60% of business-to-business music libraries by 2028.
Independent artists face the worst of both outcomes. AI democratizes production (good) but floods streaming platforms with algorithmic content that drowns out human creators (bad). Your song now competes with infinite AI variations. 4
What Warner Is Really Doing
Robert Kyncl, Warner CEO, outlined three pillars: legislate, litigate, license. Translation: push for favorable laws, sue companies you don’t control, and extract licensing fees from those you do.
This is standard corporate strategy. Control the negotiation with litigation, then monetize the outcome through licensing. It’s not about protecting artists; it’s about which company owns the revenue stream. 5
Simultaneously, Warner partnered with Stability AI to build professional music production tools. This deal uses slightly different framing—protecting creators while “enhancing their creative process.” But it follows the same logic: if AI is inevitable, license it and profit.
The Deals
The most prominent “industry-wide” news is the deal with Klay Vision, but the settlement and licensing deal with Udio is arguably the most significant pivot.
Here is a breakdown of what happened and why it matters.
- Stability AI: WMG partnered with them to build “responsible,” professional-grade AI tools for producers and songwriters.
- Klay Vision: WMG (along with Sony and Universal) signed a deal with this startup to build a “Large Music Model” trained entirely on licensed content. Klay aims to create a new “active listening” experience rather than just a meme-song generator.
- Udio: WMG settled its copyright lawsuit with Udio and immediately signed a licensing agreement. This allows Udio to use WMG’s catalog to train its AI, paving the way for a new platform in 2026 where users can legally remix and create songs using professional artists’ voices and tracks.
What Happens Next
The platform launches in 2026. Artists decide whether to participate. Revenue-sharing details (still undisclosed) either prove fair or expose the licensing model as extraction dressed as partnership.
Sony’s ongoing litigation against Suno and Udio will shape the regulatory landscape. Court decisions on fair use could validate AI companies’ arguments or establish that unauthorized training on copyrighted works constitutes infringement. 6
One certainty: the deal is a win for Warner and Udio, a complex outcome for participating artists, and a straightforward loss for everyone else competing in the space.
- https://techcrunch.com/2025/11/19/warner-music-settles-copyright-lawsuit-with-udio-signs-deal-for-ai-music-platform/ ↩︎
- https://www.reddit.com/r/SunoAI/comments/1p21jg8/warner_music_group_settles_ai_infringement/ ↩︎
- https://www.musicbusinessworldwide.com/market-for-gen-ai-outputs-to-be-worth-over-16bn-annually-by-2028-but-it-could-cannibalize-24-of-music-creators-revenues-cisac-predicts/ ↩︎
- https://www.forbes.com/sites/virginieberger/2024/12/30/ais-impact-on-music-in-2025-licensing-creativity-and-industry-survival/ ↩︎
- https://www.musicbusinessworldwide.com/suno-will-be-reading-robert-kyncls-new-blog-post-very-closely-as-wmg-ceo-vows-to-legislate-litigate-license-in-the-era-of-ai-music-creation/ ↩︎
- https://level.law/news/why-the-suno-lawsuit-matters-for-the-music-tech-ecosystem ↩︎
* generate randomized username
- So, "new revenue streams for artists?" i doubt it. Sounds more like Warner decided fighting ai was costing too much, and now they're double-dipping by licensing their music and controlling how it's used. a walled garden? really?
- so basically, Warner couldn't win, so they decided to bleed Udio dry. i bet artists see pennies on the dollar from this "new revenue stream." its a shame it worked. they're stifling innovation, not fostering it. This is not going to end well for us little guys.
- So, basically, Warner tried to bully Udio, failed, and now wants a cut? i wonder how much of that "new revenue stream" will actually go to the artists, and how much will line Warners pockets. seems a little sus to me.
- #1 Lord_Nikon [12]
- #2 Void_Reaper [10]
- #3 Cereal_Killer [10]
- #4 Dark_Pulse [9]
- #5 Void_Strike [8]
- #6 Phantom_Phreak [7]
- #7 Data_Drifter [7]
- #8 Zero_Cool [7]
