Welcome to Eye on AI, with AI reporter Sharon Goldman. In today’s issue: The small business owners managing whole armies of AI employees…Meta keeps delaying the release of its new AI Model to developers…How courts are coping with a flood of AI-generated lawsuits.
Yesterday, AI music generator Suno announced a new $400 million funding round at a $5.4 billion valuation, the latest sign that investors believe AI-generated music is here to stay. Ironically, just a few days earlier, I was sitting in a 14th-century French château in the Loire Valley with a dozen other songwriters, geeking out over lyrics, melodies, and rhyme schemes at a bucket-list retreat.
The contrast, of course, is striking: On one side, a startup built on the idea that anyone can create a song in seconds. On the other, people traveling across the ocean to spend a week doing it the slow way.
But after spending the week far away from Silicon Valley, both physically and metaphorically, I’m not convinced either vision settles the bigger questions about AI music.
Remarkably convincing songs in seconds
If you’ve ever tried Suno (and I strongly suggest you do), it’s pretty awesome. With a simple text prompt, it can generate remarkably convincing songs in seconds. The possibilities can be breathtaking, hysterically funny, and viral, like the trend this spring turning messaging threads with friends into songs, and then sharing them on TikTok. Personally, I enjoyed this Suno-generated song that turned text messages between Sam Altman and Mira Murati from the day Altman was fired from OpenAI in 2023—messages later introduced as evidence in Elon Musk’s lawsuit against OpenAI—into a song in the style of the Broadway musical Hamilton.
In a blog post announcing the new funding, Suno wrote that its initial focus was simple—to allow more people to experience the joy of making music. “In recent months, we’ve seen Suno become part of culture in ways that continue to surprise us,” said the post. “Family members are turning text threads, group chats, and inside jokes into songs. People are writing songs for birthdays, graduations, and even work events. Viral trends helped propel Suno to #1 in the App Store’s Music category in dozens of countries.”
It cited meaningful use cases such as patients in hospice care using Suno to leave songs behind for loved ones; therapists helping teens navigate mental health challenges through music creation; caregivers for people with dementia and Alzheimer’s creating personalized songs tied to memories and familiar voices.
Uncertain demand and legal issues
But while the technology is impressive, and clearly has an audience, what’s less clear is whether that audience is large enough to support the kind of venture-scale business implied by a $5.4 billion valuation. Could Sumo become a daily habit like Spotify, Netflix, or ChatGPT?
Demand isn’t the only uncertainty: Sumo and its competitors are trained on vast numbers of human-created songs, and the legal battles over whether that training is lawful are far from resolved.
I’ve been covering those disputes since Suno and rival Udio emerged in 2023. As I wrote in a 2024 Fortune essay, Sony Music Group—which represents artists including Adele and Beyoncé—warned hundreds of AI companies not to train models on its content without permission. Artists including Billie Eilish, Nicki Minaj, and Stevie Wonder signed an open letter arguing that “this assault on human creativity must be stopped.”
Suno and Udio have both acknowledged using copyrighted recordings to train their models, but argue that the practice is protected under the legal doctrine of fair use. Copyright holders disagree. Universal Music Group, Sony Music, and Germany’s GEMA have continued to pursue legal action against Suno, while Warner Music Group reached a licensing agreement with the company last year.
The scale of the dispute has only grown. When the record labels first sued Suno in 2024, they alleged the company had trained on roughly 560 copyrighted works. Last month, they sought to amend their complaint to claim that more than 61,000 additional songs were used without permission. Meanwhile, both Suno and Udio have asked courts to keep the size of their training datasets confidential, arguing that the information could help competitors build rival products.
For now, investors appear willing to look past those legal uncertainties. Suno remains one of the most popular music apps in the world, and according to fundraising materials obtained by Billboard, users were generating more than 7 million songs per day at the time of its latest financing.
Menlo Ventures, which led Suno’s Series C last fall, said in a blog post that it was “thrilled” to double down on Suno in its latest round, and pointed out that “Every major consumer platform is built on a new behavior. TikTok made short-form video consumption mainstream. Netflix changed how we watch TV. Suno is doing something different: making creation itself a form of entertainment.”
Suno appears to be banking on future partnerships with the music industry, including a new music model. “We believe there’s a huge opportunity to create new experiences for fans while helping artists reach audiences, build community, and unlock new creative and economic possibilities,” the company’s blog post read.
A spectrum of technology use in music
Whether or not Suno succeeds, I suspect music will continue to exist on a spectrum of technology use, which has existed since recorded music began with the invention of the phonograph. Even among my cohort at the château, there were songwriters who routinely relied on online beats, digital recording software, pitch correction, social media distribution, and countless other technologies. Musicians have always adopted new tools when they found them useful.
As The Verge reported a few months ago, even some Nashville songwriters are already experimenting with AI tools to generate demos and explore ideas more quickly. I suspect we’ll see more of that.
But will making music become a mass-market form of entertainment in its own right? I prompted Suno to write a yearning country song about that—and this entire essay. The result is both weird and impressive, but also doesn’t answer the question. Only time will do that.
With that, here’s more AI news.
Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman
This story was originally featured on Fortune.com