JOHN P. O’BRIEN, TECHNOLOGY ATTORNEY

AI Startups Face Serious Challenges in the Music Industry

Artificial intelligence is challenging virtually every aspect of art, and music is no exception. Some argue (somewhat understandably) that an AI platform will never be able to match the music produced by a human composer. Music certainly has a certain undefinable quality – an almost magical element that only the human soul can generate. Could this change in the future? While the likes of Mozart might never be beaten, current pop music sets a notably lower bar.

Aside from beating human composers, music-based AI also faces a multitude of legal challenges. If you are building one of these AI startups, you’re probably already familiar with many of these issues.

Udio Strikes Back with New AI-Based Music Tool

In 2024, an AI startup called Udio was sued by major record companies such as Sony, Universal, and Warner. All of these companies alleged that Udio and another company called Suno illegally trained their AI platforms using copyrighted music without permission. Both AI startups predictably argued that their AI training fell under the “Fair Use” doctrine. The outcome of this lawsuit is not yet certain, but these platforms seem to be taking steps to limit legal exposure. For those who do not know, Udio and Suno allow users to generate music with simple text prompts. Often, users request music “in the style of” famous artists or songs.

First, Udio rolled out a new policy that prevented users from using this “style reference” feature

unless they actually own the music they want to replicate. In other words, you would have to purchase a copy of Gimme Shelter by the Rolling Stones before you could ask Udio to generate a song in the same style. However, there is no word on how Udio intends to confirm whether users actually own the songs in question.

Udio also introduced its new “Styles” feature, which promises to replicate the “sonic identity” of users’ favorite songs. Udio claims that this feature is geared toward artists who want to ensure consistency across numerous songs. For example, you might be creating an album with a very distinct style. This feature could help you make sure that all of your songs match your target style. That being said, some are concerned that artists will simply use this feature to copy existing songs and claim them as their own.

The Battle Against AI-Generated Music is Only Just Beginning

AI-generated music is still relatively new, and Udio only launched last year in 2024. Record companies are scrambling to catch up and react to this threat, which could theoretically put them out of business. The music industry was facing challenges even before the rise of AI, with few people purchasing albums – and physical copies have become almost unheard of. Streaming platforms like Spotify mean that many artists now focus heavily on concerts as their primary source of income. But that doesn’t mean record companies are simply going to sit back and let their intellectual property be copied.

Sony Music is a leader in the fight against AI-generated music, and new tech companies promise to identify the telltale signs of these computerized tunes. One of the key challenges is the unauthorized use of not only a singer’s voice but also their physical appearance. As an example, the Inquirer points to a K-pop performance by Ariana Grande – a performance that is completely generated by AI. Many record companies are serious about protecting the likeness of their artists. In an era when concerts rake in the cash, the face of a singer can be just as valuable as her voice.

Aside from record companies, streaming platforms like YouTube are also taking steps to detect and eliminate these “deepfake songs.” Speaking of K-pop, the Korean music industry is also joining the battle against AI-generated music. In April of 2025, the Korea Music Copyright Association completely banned the registration of AI-generated music – launching a “0% AI” policy. In other words, it will be impossible to profit from any AI-generated music in South Korea.

Could the USA take a similar approach? Maybe not. On numerous occasions, President Trump has promised to deregulate AI. The US Copyrights Office published a memorandum in January stating that AI-generated music can receive copyright protection. The only requirement is that a human “contribute substantially” to its creation. Could this “contribution” be as simple as a text prompt? The answer is not exactly clear – but South Korea has clearly taken a more aggressive stance than the United States in the fight against AI-generated music.

Artists are Also Raising the Alarm on AI-Generated Music

Like the record companies that represent them, musical artists are extremely concerned about the rise of AI-generated music. For example, the guitarist of Iron Maiden, Adrian Smith, recently vowed never to use AI to create future projects:

“No way. I don’t know. I don’t even wanna think about it. I mean, AI What was it someone was telling me the other day? Somebody, as a birthday present or as a present to his friends, he had a song written by AI for each one of them, using their voice. And it’s just mind-boggling. It’s like the beginning of the end. I mean, social media’s bad enough. But this is just another level.”

However, one gets the feeling that we have yet to see what AI is really capable of in the musical world. AI-generated art has already caused serious, potentially career-ending consequences for professionals like graphic designers. Could musicians be next on the chopping block?

Can a Tech Lawyer Help Me Overcome Legal Challenges to Music-Based AI?

If you’re in the process of building a music-based AI startup, effective legal guidance could be critical. As we have seen, many of these platforms have faced significant legal challenges – and regulatory compliance may be as important as the code that powers your music. Many copyright groups are already taking steps to ban AI-generated music entirely, but your platform can pivot effectively with the right strategies. Consider working with an experienced tech lawyer for consulting services, license agreements, and other legal solutions when building your startup. Contact John P. O’Brien today for more information.

About The Author

John P. O'Brien
John O’Brien is an Attorney at Law with 30+ years of legal technology experience. John helps companies of all sizes develop, negotiate and modify consulting contracts, licenses, SOWs HR agreements and other business related financial transactions. John specializes in software subscription models, financial based cloud offerings, and capacity on demand offerings all built around a client's IT consumption patterns and budgetary constraints. He has helped software developers transition their business from the on-premise end user license model to a hosted SaaS environment; helped software develop productize their application and represented clients in many inbound SaaS negotiations. John has developed, implemented and supported vendor lease/finance programs at several vendors. Please contact John for a free consultation if you or the organization you work for is tired of trying to develop, negotiate and/or modify contracts and tech agreements of any type.

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I am a legal professional specialized in helping companies of all sizes develop, negotiate and/or modify consulting contracts, licenses (in-bound or out-both), SOWs, HR agreements and other business related financial transactions. This experience provides a powerful resource in navigating the challenges tech companies and tech consumers face in growing their business, managing their risks and maximizing their profits.

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