Nov 25 (Reuters) - Warner Music Group ( WMG ) settled

its copyright infringement case with artificial

intelligence-powered song creation platform Suno, enabling the

startup to launch licensed AI models next year, the companies

said on Tuesday.

Suno's rival Udio has also settled its copyright dispute

with Warner Music ( WMG ) and Universal Music Group recently,

as music companies look to open new revenue streams for the

artists and songwriters, while protecting their work.

Major record labels are trying to safeguard their vast

catalogs in a sharply evolving music industry, where a surge in

AI-generated music has raised ethical concerns, with users

unable to distinguish AI content from human-composed songs.

Under the deal, Suno will introduce new licensed AI models

that will replace its current versions in 2026.

Suno, which last week raised $250 million at a $2.45 billion

valuation, said it will also implement download restrictions,

making songs created on the free tier playable and shareable

only, while paid users will have monthly download limits with

options to purchase more.

"We'll be rolling out new, more robust features for

creation, opportunities to collaborate and interact with some of

the most talented musicians in the world," Suno CEO Mikey

Shulman said in a statement.

The record labels sued Udio and Suno last year, alleging the

AI companies copied hundreds of songs from some of the world's

most popular musicians to teach their systems to create music

that will "directly compete with, cheapen, and ultimately drown

out" human artists.

Udio and Suno had said the use of copyrighted sound

recordings to train their systems qualifies as fair use under

U.S. copyright law, and they called the lawsuits attempts to

stifle independent competition.