Universal Music Group and Sony Music Entertainment are suing Suno for training its AI models on copyrighted recordings without permission. Their core argument: Suno's subsequent licensing deals with Warner Music Group and BMG prove a commercial market for AI training licenses existed all along—and that Suno's earlier use without licenses caused measurable harm.
Suno counters that it relied on fair use, which allows copyrighted material to be used without permission under specific circumstances. Courts weigh four factors, including whether the use harms the market for the original work. The label strategy is to use later agreements as evidence that such a market existed when Suno trained its initial models.
Warner settled with Suno in November 2025, agreeing to license its catalog for AI training and development. BMG followed in August with a global agreement covering recorded music and publishing. These deals, Universal and Sony argue, demonstrate licensing demand that Suno should have recognized and paid for from the start.
Suno's legal team makes a narrower but potentially stronger argument: these settlements reflect business decisions made under litigation pressure, not market conditions that existed when the disputed training occurred. A court cannot retroactively find market harm based on deals negotiated after the fact.
The Warner settlement itself has become a flashpoint. During discovery, Universal and Sony sought access to its confidential terms, betting they could show robust demand for training licenses. U.S. Magistrate Judge Paul Levenson blocked access, citing limited relevance and confidentiality concerns. U.S. District Judge F. Dennis Saylor upheld that ruling, keeping the specific deal terms sealed but leaving the broader fair use question unresolved.
Other AI copyright cases have produced conflicting precedent. A federal judge rejected market-harm arguments against Meta, finding no evidence that lost AI training licenses constituted cognizable damage. A separate ruling found that Anthropic's use of lawfully acquired books to train Claude qualified as fair use. Neither case directly controls Suno's outcome, but both suggest courts may scrutinize the "market harm" theory more closely than the music labels expect.
A complicating factor: the American Federation of Musicians sued both UMG and WMG over their Suno and Udio settlements, claiming the deals allow AI companies to use union musicians' work without consent. The AFM alleged that the labels received significant compensation for past violations and licensed substantial catalog portions for both retroactive and ongoing training. Sony Music has rejected settlement overtures and remains the only major label still litigating against Suno.
The timing distinction cuts to the heart of fair use doctrine. If Suno can persuade the court that no viable licensing market existed when it trained its models—only afterward, through strategic settlements—the later deals become irrelevant to the fair use analysis. Conversely, if the court finds that a market should have been obvious to a reasonable company, the labels' settlement argument gains force. The outcome will shape how courts treat AI training across industries.
