The AI Music land grab: Why every major label is suddenly signing AI deals
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It was just two years ago that Universal Music Group had its teeth into suing various AI music start-ups. And this week, it signed a multi-year strategic partnership with one of them. It isn’t contradictory. That’s the strategy at work as planned. On September 10, Universal Music Group and ElevenLabs announced a licensing agreement and “wider strategic collaboration” to create a new music platform powered by AI where the fans can create their own versions of music featuring participating artists. This is the first deal ElevenLabs has made with a major record label. The language used in the announcement speaks of “responsible AI” and artists getting a part of “the value created,” and it may be well-intended, but to me, it sounds like an old tale: UMG sued AI music start-ups not because of the music but to determine the cost of admission.
SurveyThe lawsuit was the opening bid, not the fight
For two years, UMG and Udio were locked in a battle over copyright. But in October 2025, that concluded in the form of a settlement. However, “settlement” hardly describes it. In fact, UMG and Udio have inked new licensing deals in terms of recordings and publishing, compensation, and have agreed on the launch of a licensed subscription service under the brand name Udio in 2026. It is important to note that while the lawsuit didn’t kill Udio, it was UMG’s tool for gaining an ownership stake in the company.
Compare this to the recent ElevenLabs deal. Not to mention Suno, which has reached a similar agreement with Warner Music, BMG, and Believe right after UMG and ElevenLabs. Three major label agreements with three separate AI firms, arriving within 48 hours from each other. Coincidence would be too mild a term for this phenomenon. And it certainly shows how an industry tested for two years its legal leverage over the technology in question and cashed it out once it found that leverage to be rather large.
The lawsuits and the licensing deals were the same play
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What ought to be the salient point is not the switch from lawsuit to partnership but the fact that there was never a switch at all. Sue first, prove that you can render the business model of an AI company illegal overnight, then offer a path to salvation that just so happens to involve you taking a piece of it forever. It is the same thinking as a landlord bringing legal action against a squatter, then, once the squatter has run out of options, offering a three times the rent lease.
The quotation by Sir Lucian Grainge in the press release talks about the alignment in making “artists, songwriters, and fans central.” Perhaps. But pay attention to what is really being put at the center of the deal structure: UMG’s music catalog, UMG’s licensing terms and conditions, and the ability for UMG to determine who will be able to “participate” in the deal at all. The fans receive a remixing utility. The artists receive a promise of compensation without any figures even mentioned in the press release.
Why every label is doing this at once
Nothing here is limited to UMG. The AI music startups needed these deals far more than the labels did. ElevenLabs has been rapidly entering the music space over the past year, and a product based on training data without licenses can be shut down with one lawsuit. Suno was in the same position and sought the same solution. Once one of the major labels gets a deal done, every other unsigned AI startup is suddenly in competition with a legitimate rival when it doesn’t even have one. This isn’t a race among labels. It’s a race by AI startups to get licensed before a lawsuit goes from being a negotiating tool to an endgame.
UMG didn’t lose its battle with AI music, nor had it changed its mind about “responsible innovation.” UMG won the battle in private, in such a way that the only remaining AI music startups are paying the label to stay in business. The lawsuits weren’t the antithesis of this deal; they were the down payment on it.
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