Copyright’s witching hour strikes as Universal Music Group announce licensing agreements with Udio and Stability AI

[Georgia Jenkins]

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Copyright’s witching hour strikes as Universal Music Group announce licensing agreements with Udio and Stability AI

 Georgia Jenkins Friday, October 31, 2025 - AI training, AI-generated music, Artists, Copyright infringement, fair remuneration, fair use, Georgia Jenkins, licensing

This GuestKat thought she may have overdone the Halloween references on a recent post, but it turns out witching hour has only just begun in copyright land. With the moon high overhead, Universal Music Group (UMG) have been busy securing licensing deals with AI startups. Firstly with Udio, known for music generation, and secondly, Stability AI, a provider of generative AI models for images, video, audio and 3D assets, and infamously, Stable Diffusion. Amidst the global legal haze surrounding training AI models, from courts to the legislative process, private ordering has begun to shape copyright norms from the shadows.

By daylight, these AI startups faced similar copyright infringement litigation. UMG, alongside other labels, commenced copyright infringement litigation against Udio, and Stability AI is involved in lawsuits from both a class action of visual artists and Getty Images, in the UK and US. These lawsuits centre on the scope of protection of the current copyright system to cover acts related to training AI models (from access to copyright works to data preparation processes), with the UK Stability AI case narrowed to secondary infringement.

Photo by Reba Spike on Unsplash These cats are dutifully taking note of AI copyright witching hour

Only last week, UMG argued that Udio’s motion to dismiss the lawsuit 'mischaracteriz[es] [...] the legal landscape'. In addition to mass copyright infringement, Udio was alleged to violate copyright by circumventing YouTube’s technological protection measures (TPMs).

This is interesting following Bartz where Judge Alsup found that using lawfully accessed works to train AI models was transformative: Fair use does not apply to anti-circumvention-based infringement. Udio dubiously argued that TPM infringement merely extends to access controls, not copy controls. Further that anyone can access YouTube content without restriction, and that UMG’s argument does not cover Udio downloading videos to use as AI model training data. Such an approach, they contend, would disrupt the ‘public’s right to engage in fair uses of content that is lawfully accessible’. Naturally, UMG argued that ‘stream-ripping’ is not lawful access.

AI licensing agreements

And yet in the face of incredibly polarizing views of the copyright system, UMG and Udio have concluded ‘industry-first strategic agreements’ that settle this litigation. Perhaps, more surprisingly, the agreement will see both partners ‘collaborate on an innovative, new commercial music creation, consumption and streaming experience’. This includes launching a new platform next year with ‘new cutting-edge generative AI technology that will be trained on authorized and licensed music’.

You may be experiencing a spooky sense of déjà vu given Spotify's own plans for AI-powered connection between fans and artists, that also received UMG’s blessing. It seems that the Udio platform, under the wax of a full moon, will shift into a ‘licensed and protected environment to customize, stream and share music responsible, on the Udio platform’. Eerily similar to Spotify, this could mean that:

[U]sers will not be able to export works made within Udio’s forthcoming platform. Instead, users can enjoy their creations within the service, which will be geared towards fans. Some capabilities are said to include mashups, remixes and tempo changes to existing, licensed works as well as voice swapping with UMG artists’ voices who have chosen to make their vocals available to users. 

UMG appear to have been lurking in the shadows for longer than some may realize. Something of a copyright clairvoyant, UMG is quick to characterize itself as playing ‘a pioneering role in fostering AI’s enormous potential and is the first company to enter into AI-related agreements with YouTube, TikTok, Meta, KDDI, KLAY Vision, BandLab, SoundLabs and Pro-Rata, among others.’ The latest addition, Stability AI. From what this Kat can gather, it seems that Stability AI is being drafted in as part of UMG’s strategic vision as trailblazer (or perhaps harbinger?) of AI music creation, distribution and consumption.

Stability AI explain that it will work with UMG to ‘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’. The idea is to innovate new ways of recording and composing, building from artist needs and their engagement with AI technologies. This agreement, apparently, forms part of a new reputation for Stability AI, as a responsible AI partner (see, its agreements with Electronic Arts (EA) and WPP) as opposed to annoying thorn in rightsholders’ sides.

Comment

While the music industry has taken centre stage over the last few months, the existence and anticipated outcomes of these cases have had broader implications for private ordering. And so, as the moon waxes, a spate of new licensing deals have come out of the woodwork across all copyright-linked industries. For example within publishing, Amazon has entered AI licensing agreements with The New York Times (NYT) and Condé Nast and Hearst (incl. Good Housekeeping, Cosmopolitan, Harper’s Bazaar). While the latter was announced in relation to Amazon’s AI shopping assistant, Rufus, some have speculated that NYT content will be used across Amazon's AI products which also includes Alexa. Given NYT’s critique of OpenAI and Microsoft, some quite rightly pondered what the ‘right price’ is, if ‘everyone is open for business’.

UMG lead with the headline that ‘the new licensing agreements for recorded music and publishing will provide further revenue opportunities for UMG artists and songwriters’, in addition to compensation for past use. Obviously, Udio agree, reinforcing this image of ‘doing what’s right by our artists and songwriters, whether that means embracing new technologies, developing new business models, diversifying revenue streams or beyond’. However with fragmentation within the music licensing ecosystem, this is a more complicated undertaking than a press release, and one that ultimately must involve collective management organizations that manage compositions and lyrics.

Indeed some are not so easily bamboozled by these new ‘diverse revenue streams’, noting that: 

History has taught us that the major labels often act based on short-term financial gain rather than long-term protections for artists and the industry as a whole. […] We may once again find ourselves locked into licensing frameworks that fail to account for the deeper implications, both in terms of creative control and economic fairness for the independent community when a unified voice should be front and center when responding to disruptive innovation.

Again, the question is what about creators that do not consent. These licensing deals include compensation over unlawful past use, but allow future reuse at a price. A price that is most likely a good deal for UMG’s vision as an AI-powered music on-stop shop platform. It leaves proposals, like Australia's recent legislative rejection of a TDM exception flattering, but ultimately unhelpful, unless those that create, not exploit, have direct lines of compensation, given the dominance of private ordering. These deals are setting the industry price for access to copyright works for training AI models. Some muse whether this could lead to lower prices and more unbalanced terms, but it might actually foreclose licensing opportunities entirely for those that disagree.

This ‘technological and business landscape’ according to Andrew Sanchez, the Co-Founder and CEO of Udio, ‘ will fundamentally expand what’s possible in music creation and engagement’. But for this Kat, the witching hour is now. Deals being are struck in the shadows, leaving creators left to wonder (and haunt?) the fairness of copyright past.

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