What UMG’s AI Partnerships with Udio and Stability AI Mean for Artists and the Music Industry

The speed with which artificial intelligence (AI) news moves was on full display when, within the span of 24 hours, Universal Music Group (UMG) recently announced two significant AI-related developments.

First, on October 29, 2025, UMG it had settled ongoing copyright infringement claims against Uncharted Labs, Inc. (dba Udio), an AI-powered music creation platform, and has licensed recorded music and publishing assets for use on Udio’s new subscription service. The announcement states that Udio’s new subscription service will allow users to “customize, stream, and share music” on an AI platform that has been trained on “licensed and authorized” music. UMG’s license agreements with Udio are expected to generate income for UMG artists and songwriters and represent a move to embrace emerging technologies. Notwithstanding this settlement, UMG’s lawsuit against the AI music platform Suno remains ongoing, as do other major labels’ claims against Udio and Suno.

Then, the following day, on October 30, 2025, UMG a “strategic alliance” with Stability AI, through which the companies will develop “next-generation professional music creation tools, powered by responsibly trained generative AI and built to support the creative process of artists, producers and songwriters globally.” UMG and Stability AI have emphasized taking an artist-centric approach to developing these music creation tools, and the companies intend to prioritize the creative community’s input in creating AI music tools that are “fully licensed” and “commercially safe.” Unlike with Udio, UMG did not have pending litigation against Stability AI.

UMG’s decision to partner with Udio and Stability AI marks a pivotal moment for the music industry’s relationship with AI, but also raises key questions for artists, rightsholders and other industry players about what such partnerships will mean for them and the industry at large. Here is what we are watching:

1. How Do These Agreements Affect Artists’ Intellectual Property?

Obtaining artists’ and songwriters’ consent before using their works to train AI systems and generate new musical works will be crucial to maintaining a fair partnership between creators, labels and AI companies. For example, an artist may see AI as beneficial in certain contexts, but not others. Or multiple contributors and rightsholders may disagree about how a recording can be used by an AI platform. Therefore, artists should consider creative controls before opting in to such partnerships and will want to monitor how their priorities and needs may change over time as the market for AI-assisted music generation evolves.

2. How Much Revenue Will Actually Flow Through to Artists?

While AI presents an opportunity to generate new revenue streams, it also raises questions about whether artists and rightsholders will actually see meaningful financial benefits commensurate with the value of their work. While UMG’s settlements were hailed by rightsholder and artist groups, the devil will—as usual—be in the details. Artists and rightsholders will need transparent reporting and guidance around how their IP is used and how the revenue shows up on their statements. Accordingly, it will be critical for artists (and other contributors like producers and mixers) to understand how they will be compensated before opting in to AI systems and for labels and AI companies to be responsive to artists and songwriters in such AI partnerships.

For now, there is reason for cautious optimism, as voiced by groups like Music Artists Coalition, which highlighted the need for three Cs: consent, compensation, and clarity around such deals. MAC board member and co-founder Irving Azoff that “[e]very technological advance offers opportunity, but we have to make sure it doesn’t come at the expense of the people who actually create the music—artists and songwriters.” And MAC board member and Manatt partner Jordan Bromley stated that “We’re cautiously optimistic but insistent on details,” and that “[t]rue partnership requires appropriate oversight and remuneration for all involved parties.”

3. What Are the Core Provisions of These Deals?

To that end, while AI’s role in the music industry continues to develop and shift, artists must be given sufficient insight into the deals being struck between labels and AI platforms. Relevant questions include when monies for AI-generated works will be accounted to artists, what an audit process would entail, whether artists will be notified of how often their works are being used within an AI platform, and whether revenues generated by an AI platform would factor into recoupment of outstanding balances with an artist’s label. It is essential that creators understand what they are agreeing to when they opt in to an AI-label partnership.

AI’s place in the music industry and other content-creation spaces has become impossible to ignore and not possible to wish away. Now, it is the continued responsibility of stakeholders across the industry to protect human creative expression and ensure that the creators who provide the building blocks of AI-generated materials are appropriately valued and informed of the impact of these new technologies on their own careers.