AI Music Companies Are Settling, Not Winning — and Fair Use Is Still Undecided

What happened

The Recording Industry Association of America filed the first wave of AI music copyright suits against Suno and Udio in June 2024. Two years on, almost none of the substantive legal questions have been answered in court. What has changed is who owns the dispute.

• October 2025 — Universal Music Group settled its case against Udio and entered a licensing arrangement to build a platform using authorized music.
• November 2025 — Warner Music Group, an original plaintiff, settled with Suno and entered a licensing partnership under which Suno agreed to develop new models using licensed music.
• August 2026 — BMG signed a global agreement with Suno covering its recorded music and publishing catalogs.
• Sony Music continues to litigate against both Suno and Udio.

Universal and Sony are now arguing that Suno's later licensing deals show a commercial market existed for licensed training data all along — which, if accepted, bears on the market-harm prong of the fair-use test. Suno's position is that a settlement reflects the compromise of litigation, not the market conditions that existed when its models were trained. A magistrate judge declined to force disclosure of Warner's confidential settlement terms, and that ruling was upheld, leaving the broader fair-use question open.

Why it matters for independent rights holders

Three of the four largest rights holders have moved from plaintiff to licensor. That is a meaningful signal about where catalog value is assumed to sit — but it is a deal between consenting parties, not a precedent that binds anyone else.

For an independent artist or label, the practical consequence is that "licensed training" is becoming the industry's stated norm while the rules that define it remain unsettled. Nothing about a major-label settlement tells you what your own consent is worth, or whether a model trained before those deals existed owes you anything.

What is still undecided

Courts have reached different conclusions in adjacent cases — one rejected the argument that lost licensing fees alone establish market harm, another found a particular training use to be fair use. Neither controls the Suno case. Whether training on copyrighted recordings is fair use remains an open question, and so does the weight a later licensing deal carries in that analysis.