Suno's efforts to secure licensing agreements with the music industry's biggest players have hit a significant roadblock. Negotiations with Universal Music Group (UMG) and Sony Music Entertainment have made little substantive progress in recent months, according to reporting from the Financial Times, with sources saying there is currently "no path forward" with Suno's proposed model for distributing AI-generated music .

The stalled talks represent a critical moment for the AI music startup, which raised $250 million in Series C funding at a $2.45 billion valuation in November 2025 and claims over 100 million users . While Suno secured a settlement and partnership with Warner Music Group in November 2025, that deal has also seen minimal progress since its announcement, despite the companies' initial promises to "open new frontiers in music creation, interaction, and discovery, while both compensating and protecting artists, songwriters, and the wider creative community" .

Why Are the Major Labels Rejecting Suno's Proposal?

The core issue appears to be fundamental disagreement over how AI-generated music should be distributed and monetized. A person involved in the negotiations told the Financial Times: "We have ongoing engagement, but there is no path forward with the current proposal" . Neither UMG nor Sony has publicly detailed their specific objections, but the rejection suggests Suno's model for compensating artists and rights holders doesn't align with industry standards or expectations.

This stands in contrast to Udio, Suno's main competitor in the AI music space. Udio settled with both UMG and Warner Music in late 2025, with those agreements including licensing deals for a new AI music platform expected to launch this year . The fact that Udio has moved forward where Suno has stalled suggests the problem may lie with how Suno structures its business model rather than with the music industry's openness to AI music tools in general.

What Obstacles Is Suno Still Facing Beyond the Major Labels?

Suno's licensing challenges extend far beyond the three major record labels. The company remains locked in active legal battles with UMG and Sony Music, as well as European music rights organizations including Denmark's Koda and Germany's GEMA . These ongoing disputes create additional friction that makes reaching commercial agreements more difficult.

Beyond legal challenges, Suno faces a growing credibility problem within the artist community itself. In February, a coalition of artist representatives published an open letter titled "Say No to Suno," describing the company as a "brazen smash and grab" platform and accusing it of using "unauthorized AI platform machinery trained on human artists' work" . The letter was signed by prominent figures including Ron Gubitz, Executive Director of the Music Artist Coalition; Helienne Lindvall, songwriter and President of the European Composer and Songwriter Alliance; and Chris Castle of the Artist Rights Institute .

How Is AI-Generated Music Affecting the Streaming Ecosystem?

The artist coalition's concerns about AI music flooding platforms appear to have real-world support. French streaming platform Deezer disclosed in January that it was receiving approximately 60,000 fully AI-generated tracks per day, representing around 39% of all daily deliveries to the platform . More troubling, up to 85% of streams on that AI-generated content were found to be fraudulent, demonetized, and removed from the royalty pool, according to Deezer .

This data underscores a key argument made by artist advocates: that AI-generated music doesn't just compete with human-created work; it actively dilutes the royalty pools available to legitimate artists. The artists' open letter argued that AI-generated music "dilutes the royalty pools of legitimate artists from whose music this slop is derived" . When fraudulent streams dominate a platform's incoming content, it reduces the percentage of total streams that go to paying artists.

Steps Suno Is Taking to Move Forward

• Executive Recruitment: Suno has hired industry veterans including Paul Sinclair, former Warner Music Group executive, as Chief Music Officer; Jeremy Sirota, former Merlin CEO, as Chief Commercial Officer; and Sam Berger, former Spotify executive, as Senior Director of Artist Partnerships .
• Product Development: The company released version 5.5 of its platform in recent weeks, introducing a voice capture feature and two personalization tools aimed at attracting first-time creators and working professionals .
• Revenue Growth: Suno reported reaching 2 million paid subscribers and $300 million in annual recurring revenue as of February, demonstrating significant commercial traction despite licensing challenges .

Despite these efforts, questions remain about the promised Warner Music-licensed V6 model. As of the Financial Times report, more than 114 days had passed since the settlement announcement with no new licensed model released, raising questions about the practical progress of that partnership .

"We want to work cooperatively with the music industry to unlock new sources of revenue for artists," Suno stated in response to the Financial Times reporting.

Suno, statement to Financial Times

The gap between Suno's stated intentions and the music industry's willingness to move forward suggests that cooperation will require more than hiring experienced executives or releasing new features. The fundamental disagreement over how AI music should be monetized and distributed remains unresolved, and the mounting evidence of streaming fraud tied to AI-generated content has only strengthened the resolve of artists and labels to demand better terms before granting Suno the legitimacy it seeks.