AI music startup Suno hits deadlock in licensing talks with Universal Music and Sony Music: Report

AI music startup Suno is facing a deadlock in licensing talks with major record labels, exposing sharp divisions over how the music industry should handle AI-generated content.

According to a report by the Financial Times, discussions between Suno and leading music companies, including Universal Music and Sony Music, have made little progress in recent months. No agreement has been reached so far, as both sides remain divided on key terms, the report said. “We have ongoing engagement, but there is no path forward with the current proposal,” a person involved in the negotiations told the publication.For those unaware, Suno is one of the most popular AI music companies. The platform allows users to create songs within seconds using simple text prompts. The company was valued at $2.45 billion last year and has around 2 million paying subscribers.

Key disagreement over music distribution

At the centre of the dispute is how AI-generated songs should be used after they are created. Universal wants such tracks to remain within apps like Suno and not be freely shared across the internet.

Suno, however, wants users to be able to distribute and share their creations more widely.Record labels argue that AI tools like Suno rely on music created by human artists and should pay for using that content. However, both sides have not been able to agree on how such payments should work. Suno said it remains open to working with the industry. “We want to work cooperatively with the music industry to unlock new sources of revenue for artists,” the company said.In June 2024, Universal, Sony and Warner sued Suno and rival Udio over copyright infringement. Suno then responded by criticising the lawsuits, with CEO Mikey Shulman accusing record labels of “reverting to their old lawyer-led playbook.”Earlier this year, a group of artists and industry organisations also urged the music industry to reject Suno, claiming its technology uses artists’ work without permission.The standoff comes at a time when music companies are under pressure, with shares of major labels falling to three-year lows amid concerns over AI. Investors are closely watching these talks, as licensing deals could determine whether AI becomes a threat or a new source of growth for the music industry.