I. Deal Overview
On September 10, Universal Music Group (UMG) announced a multi-year strategic agreement with AI audio company ElevenLabs to launch an AI-powered music creation platform, allowing fans to remix, mash up, and create "personalized vocal experiences" using tracks from artists who opt in to the program. This marks the latest in a string of settlements between record labels and AI companies over the past year or so — Warner previously settled with Suno, and UMG settled with Udio, both moving from litigation into commercial partnerships. Terms of the UMG-Udio deal, as previously reported, reportedly include a per-generation royalty of roughly $0.002 to $0.005, with higher rates for commercially distributed outputs, along with audit rights over training data.
By the end of this year, will UMG or Sony reach a settlement with Suno?
But not every rights holder is embracing that path. Sony Music is currently the only one of the three major labels still suing both Suno and Udio simultaneously. Behind that divergence lies a pivotal, unresolved lawsuit: the UMG and Sony case against Suno, where the central dispute is whether the "fair use" doctrine applies to AI training data.
The lawsuit was filed on June 24, 2024, when the RIAA, representing UMG, Sony, and Warner, brought a copyright infringement suit against AI music generation platform Suno in federal court in Massachusetts, accusing the company of copying copyrighted recordings "on a massive, ongoing basis" and feeding them into its AI model for training. The case's core question is whether training an AI model on copyrighted recordings constitutes "fair use" under U.S. copyright law — if it does, such use would not require permission or payment. Warner exited the lawsuit in November 2025 through a settlement agreement.
Notably, the litigation hasn't slowed Suno's commercial trajectory. The company raised more than $400 million in June 2026 at a $5.4 billion valuation, suggesting investors remain confident in its business even as the legal questions surrounding it stay unresolved.
II. Where the Two Sides Stand: A Legal Debate Over Whether Training Counts as Creation
Suno's position is that AI training constitutes "transformative use," and should therefore be recognized as fair use. The company has cited the precedent set in Bartz v. SoundAI, which ruled that using short audio clips for music recommendation algorithm analysis qualified as fair use.
The labels' position is that Suno's conduct amounts to substantial copying — the argument being that AI-generated songs ultimately compete directly with the original recordings in the marketplace, which they say does not meet the definition of "transformative use."
III. Why This Standoff Is Seen as Having "Industry-Defining" Weight
According to an analysis from TechTimes, Sony's litigation strategy reflects a calculation that the systemic value of a legal precedent outweighs that of any single settlement. A federal ruling establishing that unauthorized training constitutes infringement would compel every AI music company to secure licenses before training, potentially reshaping the economics of the entire generative AI music industry.
Independent legal case-tracking outlet AI Vortex offered a similar assessment: "If Suno wins on fair use, it blows up every licensing deal in the AI music space. If it loses, the UMG-Udio template becomes the industry standard."
This question isn't confined to U.S. courts, either. On July 31, a regional court in Munich, Germany, ruled against Suno in a case brought by GEMA, Germany's music rights collecting society, finding that permanently encoding copyrighted songs into the company's model weights constituted infringement — the first ruling of its kind against a generative AI music platform anywhere in the world. While that decision doesn't bind the Massachusetts court, it does give Sony's legal team an international precedent to point to, even though it was decided under a different legal framework than the one governing the U.S. case.
One counterweight worth noting: Billboard has reported that in two earlier copyright cases brought by book authors against AI companies (Anthropic and Meta), judges in both instances found that training large language models constituted "transformative use." Legal experts caution, however, that this reasoning doesn't necessarily transfer to the music industry's cases, and it shouldn't be read as evidence that AI companies already hold the upper hand.
IV. Current Status: Litigation Still in Early Stages, Settlement Talks Once Stalled
In May of this year, Sony and UMG sought to expand the case from 560 tracks to 61,026, arguing that audio fingerprinting had turned up millions of matches in Suno's training data. That motion, however, was formally denied by the judge on August 18. That same day, the judge granted the plaintiffs' request to add a new claim accusing Suno of circumventing YouTube's anti-download protections to illegally obtain training data — a practice often referred to as "stream ripping." The amended complaint was formally filed on August 25.
According to a Billboard report from roughly two weeks ago, motions for summary judgment on the fair use question aren't due until April 2027, meaning a substantive ruling remains a considerable way off. Separately, independent musicians have also filed their own class-action claims against Suno, adding another layer of legal pressure beyond the major labels' case.
Settlement talks between UMG and Suno reportedly stalled back in April of this year. Suno is currently trying to keep the terms of its licensing agreement with Warner confidential, out of concern that UMG and Sony would use those terms as a baseline for their own negotiations.
For historical context: Warner reached a settlement with Suno in November 2025, converting the relationship into a licensing agreement, while UMG and Udio moved to a "strategic partnership" in October 2025 — in both cases, the parties opted for an out-of-court settlement before the case reached the stage of a formal ruling.
