Warner Music Group has settled its copyright infringement lawsuit against Udio and will collaborate on development of the startup’s licensed AI music creation service, set to launch in 2026. “Through this collaboration, Udio will develop a next-generation music creation, listening, and discovery platform powered by generative AI models trained on licensed and authorized music,” WMG announced, noting the deal — which includes recorded music and publishing — “creates new revenue streams for artists and songwriters, while ensuring their work remains protected.” The agreement caps a week in which the major labels also pacted with AI streaming startup Klay.

“Udio’s reimagined subscription service will introduce a suite of creative experiences that enable users to make remixes, covers, and new songs using the voices of artists and compositions of songwriters who choose to participate, while ensuring artists and songwriters are credited and paid,” explains the announcement by WMG, which also this week unveiled a deal with Stability AI.

Warner sued Udio in June 2024 in a joint effort with Universal Music Group and Sony Music Entertainment. UMG settled with Udio last month in a similar collaboration while SME is still litigating with the New York-based generative music startup. The 2024 litigation, brought by the RIAA on behalf of its members, also included the music creation company Suno, which litigation is still active.

Also this week, “the world’s largest music companies have licensed their works to a music startup called Klay (officially Klay Vision), which is building a streaming service that will allow users to remake songs using artificial intelligence tools,” reports Bloomberg, noting that “Klay is the first music AI service to reach a deal with all three major record labels.”

Klay, which incorporated in 2021 but has yet to launch, “has licensed the rights to thousands of hit songs so that it can train its large language model,” writes Bloomberg, explaining that the Los Angeles-based company “is building a product that will offer the features of a streaming service like Spotify, amplified by AI technology that will let users remake songs in different styles.”

While Suno continues to fight the labels, that ongoing battle hasn’t seemed to deter the AI music sector’s biggest player, which raised $200 million this week for a valuation of $2.4 billion.

“If you want insight into just how worried VCs (and Silicon Valley, generally) are over legal challenges to AI training on copyrighted material, look no further than AI music site Suno,” reports TechCrunch.

Related:
Universal, Warner and Sony Strike Licensing Deals with AI Music Startup Klay, Variety, 11/20/25