Universal Music Group, Warner Music Group, and Sony Music Entertainment are negotiating license fees for their work with Suno and Udio. They also seek a small amount of equity in the two companies, which are leaders in using generative AI to create music. People familiar with the negotiation, who preferred to stay anonymous due to the sensitive nature of the talks, explained the reasons behind the discussions. They said that major music companies want to let AI startups Udio and Suno use their music, and this deal could set a precedent for how AI firms compensate recording artists for their work. AI companies raise conflict with media companies on copyrighted content Udio and Suno help future music creators by allowing them to enter a description of a sound or song, such as “a modern country ballad about unrequited love,” and then get an audio recording back. To make this happen, the companies must teach their software using large datasets filled with millions of information. This requires a lot of music. The intention raised by AI companies to train their large language models on copyrighted work has sparked a war between AI and media companies. AI companies have fought with major media companies over whether they must pay to train their large language models on copyrighted work. They have argued that the training is permitted under fair use, while rights holders say they need to be paid. The New York Times Co. sued OpenAI, which has struck licensing deals with companies like News Corp., the Associated Press, and Vox Media. To solve this, the music companies and the AI startups are negotiating to find common ground and try to avoid fighting it in court. The talks are unfolding on parallel tracks, providing a race to see whether a label or an AI company will strike a deal first. Complicating the talks is that the labels are pushing for more control over how their work is used. Udio and Suno are looking for a range of flexibility to experiment and look forward to affordable deals suitable for startup companies. Udio and Suno did not respond to requests for comment. The music companies also did not immediately comment. Streaming platforms to end the war between record companies and new technology The music industry has struggled to find the best way to deal with the rise of AI technology. Over the past ten years, sales have increased, but they have not fully bounced back from the harm done in the early days of the Internet when file-sharing sites and piracy severely hurt sales. Record companies have fought against every new technology, including file-sharing, user-generated content, and streaming. For instance, big music companies sued Udio and Suno last year for copyright infringement. The Recording Industry Association of America, a trade group for the major record labels, had sought as much as $150,000 per work infringed in a claim potentially totaling billions of dollars. Streaming platforms like Spotify Technology SA have helped bring life back to the industry. The industry wants to protect its copyrights while also embracing new technologies. Following this, Mitch Glazier, CEO of the RIAA, revealed that the music community has welcomed AI. Glazier further stated that they were already teaming up with responsible developers to create sustainable AI tools that focus on human creativity and allow artists and songwriters to take charge. However, based on his argument, they can only be successful if developers are open to collaborating with them. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
