Universal Music Group has reached a settlement with artificial intelligence (AI) music startup Udio, ending a copyright dispute and paving the way for a new subscription service that lets fans legally create AI-generated music using licensed songs, The Wall Street Journal reported.

Under the agreement, Udio will launch the new platform in 2026, allowing subscribers to remix or create custom tracks based on songs by Universal artists—provided those artists give permission for their work to be used. Any music generated by fans must remain within the Udio platform, which Universal said would ensure copyright protection and proper compensation for artists.

The settlement resolves one of several lawsuits Universal filed last year alongside Sony Music Group and Warner Music Group against Udio and another AI platform, Suno. The record labels alleged that both startups trained their generative AI systems using copyrighted songs scraped from the internet without permission.

Financial terms of the Udio settlement were not disclosed, but Universal said participating artists would be paid both for the use of their music in model training and when fans generate new songs from their work. Michael Nash, Universal’s executive vice president and chief digital officer, described the partnership as a way to embrace AI while maintaining artist control, saying it “allows fans to utilize AI to have a deep level of engagement with the music and artists they love.”

Udio CEO Andrew Sanchez said the new platform will feature a social component, allowing users to share creations and discover others’ AI-generated tracks in a secure, rights-respecting space.

The deal marks a significant step in the music industry’s evolving approach to AI, balancing innovation and copyright protection. Universal, home to artists including Taylor Swift, Kendrick Lamar, Billie Eilish, and Lady Gaga, has also partnered with Sony on tools to detect when human-made songs are used to train AI models.

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