This could be a landmark deal in the history of AI and music.

A while back, Universal Music Group sued Udio, a company with AI-generated music technology. The accusation was that Udio was scraping copyrighted material for the training of its AI models without permission or compensation.

That lawsuit has been settled–and the results are…interesting.

Universal and Udio say they’re going to launch a “music creation, consumption and streaming” service sometime next year. I quote:

“In addition to the compensatory legal settlement, the new license agreements for recorded music and publishing will provide further revenue opportunities for UMG artists and songwriters.

“The new platform, which will be launched in 2026, will be powered by new cutting-edge generative AI technology that will be trained on authorized and licensed music. The new subscription service will transform the user engagement experience, creating a licensed and protected environment to customize, stream and share music responsibly, on the Udio platform.

“Udio’s existing product will remain available to users during the transition period with creations controlled within a walled garden and the service amended in multiple ways—including fingerprinting, filtering, and other measures—before the launch of the updated service.”

Huh. What does all this mean for the future of AI and music? Music Ally has this analysis which includes:

• Universal saw the writing on the wall. This is the future, so it had no choice but to opt in while they still could.
• Udio will give users the power to remix music–including copyrighted tunes–as well as to create mashups.
• Existing Udio users’s can’t download any tracks they make.
• Will the other labels follow?

So. Many. Questions.

• What does this mean for a similar lawsuit involving Suno, another AI music generator?
• How will any future licensing deals affect the future of music?
• What are the revenue implications for musicians, composers, producers, and everyone else involved in the making of music?
• What about artists not on a major label? Will the various indie umbrella organizations pursue similar deals?

So much change so quickly. Read more here.