UMG Settles With Udio, Plans Licensed AI Platform

Universal Music Group has settled its copyright lawsuit with AI startup Udio and agreed to a compensatory licensing deal to jointly build a subscription AI music creation and streaming platform set to launch in 2026. The service will be trained on licensed UMG recordings and offer opt-in participation and revenue opportunities for UMG artists and songwriters. Under the agreement Udio’s existing AI-generated tracks will be fingerprinted, filtered and kept in a “walled garden”—prevented from being uploaded to streaming services or used in personal content—which has drawn angry reactions from some subscribers. Financial terms were not disclosed, and UMG’s settlement does not end other litigation over AI-generated music, which remains active with other major labels and some AI firms including Suno. Industry observers and some music professionals call the deal an “industry-first” model that could create a licensed, protected environment and a new revenue path for creators while curbing unlicensed use of catalogs by generative AI.