Suno Raises $200M After Warner Clears Legal Roadblock

0:00Warner Music has just settled a copyright lawsuit with AI music generator UDO and they've also signed a deal for an AI music platform. At the same time, we also have Suno, my favorite, personally, AI music generator, that has just raised$200 million at a$2.45 billion valuation. Today on the podcast, we're talking everything AI-generated music. There's also an AI-generated song that is hitting the top country charts. So there is a lot of craziness going on. We're going to break all of it down. Where the future is for AI-generated music, is it something that's going to get sued into oblivion or is it here to stay?

0:40I think you're going to like the answer and I think this is going to be an interesting episode for a lot of people. Before we get into that, if you want to try any of these startups that I talk about on the show, I'd love for you to go check out AIbox.ai. We have a ton of different text AI models, image AI models, and even audio AI models on there. For audio, we use 11 labs. You get access to all of the top models for$20 a month. It is AIbox.ai, my own startup. Go check it out. Link is in the description. All right, let's get into the podcast. So Warner Music Group has just settled a copyright infringement case with UDO, an AI music company.

1:16They announced this and apparently they've entered into a licensing deal for an AI music creation platform that they're going to be launching next year. They had a big press release about it and this is a quote from it. They said, the next generation music creation, listening, and discovery platform. They're essentially that they're going to create, and they said that it's going to have new revenue streams for artists and songwriters while ensuring their work remains protected. Now, Spotify recently announced something as well, but they also haven't given too many details of what this is going to look like.

1:45I will tell you what this is going to look like. Essentially, you're going to be able to go and find artists who have opted into this, maybe Drake, maybe Kanye West, maybe Eminem, and I don't know, I just listed like rappers there. Okay, I'm sure there's going to be lots of genres. So I apologize for the lack of audio diversity in those suggestions. In any case, essentially, what you're gonna be able to do, you're going to go to an artist that's opted in, you're gonna be able to say generate music in the style of this. And then you'll also be able to say, and you know, I want like a song about XYZ.

2:17You know, maybe a song about Kendrick and Lamar beefing. And you know, it's throw some disses at Kendrick's mom. Okay, I know I really got to get out of this rapper rut, but regardless, you get the idea, right? And so Spotify hinted at a very similar product, and essentially, you're gonna be able to generate music. And the artists whose, you know, likeness or whose sounds you're generating will get a royalty. Now, personally, I know there's a lot of people that feel different ways about this. And as someone who my wife is a music artist, and I also get over 20 million streams on Spotify a year, few people know this about me, but I have a whole bunch of music I've been creating since I was in college.

2:58And it's, yeah, I don't publish this anywhere. It's just organic. And yeah, I get a lot of a lot of downloads on this. And my opinion is that this is actually fantastic for the industry. People love generating AI music. I was literally generating AI music yesterday with my son. He loves to write like little tunes on the ukulele and then have Suno go and turn into a full on song with a guitar and all this background music. And it sounds amazing. And that's like a passion for him. It's a lot of fun. And it's fun for me to kind of spend time with him doing that. I think a lot of people like the fact that they're able to take maybe a small amount of musical talent and make it into a huge amount of musical talent.

3:39I know people that are hugely talented and can do everything themselves don't like this because they feel like it is, you know, kind of putting them out of a job. So I know there's a lot of different opinions about this. But personally, I am a huge fan of Johnny Cash and he has passed away. And if there was a way for me to make a new album of Johnny Cash songs in his voice, in the style of what he used to sing about, I personally would be thrilled. Now, I know a lot of people might be mortified by that. But personally, as a fan, I would just like more music by that person. It's kind of like when you have, you know, a famous artist that has passed away and 10 years later their estate releases, you know, the Beatles is a good example of this unreleased song, maybe it was a vocal that they had been kind of working on, nothing ever happened, and they go produce it and release it.

4:22The fans go crazy for it. We love it because there's no other way to get more music by them. And so I think we're going to have the same effect with AI generated music. And this is what we're going to see here. this is what Warner Music Group CEO said about this whole lawsuit and everything going on he said we're unwaveringly committed to the protection of rights of our artists and songwriters and U.U. has taken meaningful steps to ensure that the music on its services will be authorized and licensed this collaboration aligns with our broader efforts to responsibly unlock AI's potential fueling new creative and commercial possibilities while continuing to deliver innovative experiences for our fans I think really what's going on here there is this lawsuit and yes maybe one side of it, they're protecting artists rights from these AI music generators.

5:01I think really, they want a piece of the pie. I don't really think they care too much about AI generating music as long as they're making money from it. And I guess they can be sticking up for the artists, but they're also sticking up for themselves because they want money. But if the artists also want the money, and they want it on the program, then I don't think there's a, you know, a better person than their label to stick up for them and try to get them that extra money. Artists that are signed to Warner Music Group, by the way, include Lady Gaga, Coldplay, The Weeknd, Sabrina Carpenter, There are a ton of others, so all of the biggest ones, and I think you'll see similar plays from a lot of different labels.

5:34Here's something that the CEO of Udeo said about it. He said, This partnership is a critical step towards realizing a future in which technology amplifies creativity and unlocks new opportunities for artists and songwriters. I feel like it's so much boilerplate with these announcements, but the sentiment, I think, is actually pretty good. Personally, what I've seen is I have friends that are incredible singers, but they're not very good with instruments, and I've seen them release music on Spotify where they have all of the background production done by Suno and they put their own voice which is amazing on top of it and it is incredible and I think it's a huge bottleneck because they were telling me they'd spend thousands of dollars paying producers to mix and master and help produce the entire background and now they're able to do that themselves and because of that I know some people will be like oh but the poor mixer and master yes but because of that the vocalist can now create 10 times more music and I'm sure people are like, well, it's quality over quantity.

6:27But honestly, at the end of the day, as someone who, you know, my wife is a musician, what I've seen with her is if she can write 10 songs, not every song she ever writes is going to be her favorite song or one that even resonates with fans. But if she can write 10 songs, one out of 10 might be one that a ton of people love. And so if we could just incentivize or have the capability for artists to make way more music, I think we're going to find way more good music, way more creativity. so I'm all on board with with that direction as far as where these go okay let's talk about Suno because this is the company that I personally use a lot I mean I'm sure half of their two million dollars two hundred million dollars in revenue is coming from me because I use up so many credits on this platform and also by the way I have created music on Suno and posted on Spotify and am making thousands of dollars from Suno generated music I have a whole community where I teach people how to make money with AI tools.

7:21It's called AI Hustle School Community. I'll link it in the description below. But this is something that I actively use. And so the fact that they're able to raise at a$2.4 billion valuation and have$200 million of revenue is not surprising to me. The tool is incredible. And I personally use it, obviously not sponsored, but like, it's a pretty good endorsement from the fact that I'm a huge fan. Who put money into them is the question. This is a series C. And the round was led by Menlo Ventures, you know, tier one VC. and they also had NVIDIA's venture arm and ventures which got in as well as Halwood Media, Lightspeed and Matrix.

7:55They you know they have some media companies they have some tier one VCs and of course they have NVIDIA because NVIDIA is making insane amounts of money from selling GPUs to companies like like Suno they know like Suno is just gonna have to turn around and spend this money to train models and to run run these GPUs to the inference for people to create music so So it's a no-brainer for NVIDIA to invest in any of these big AI companies that are doing really well. They have a bunch of tiers. They have like a free tier. They also have an$8 tier, a$24 a month tier. And they launched a version of Suno for commercial creators back in September.

8:32So you're actually able to create like music with it and commercially sell it. Like I mentioned, I do that. And I'm under their commercial license when I post music on Spotify and Apple Music and stuff. so you're allowed to create music and you own all of the rights to it which is really cool previously in may of last year they raised a series b and that was 125 million dollars so it's not i mean yes 200 million is a lot but 125 to 200 million it's not like what we're seeing you know multiples like opening eyes doing these crazy billion dollar things but it's still a really massive jump um that time it was led by light speed ventures they had matt friedman they Daniel Gross.

9:09They had, I think, like a$500 million valuation. So to jump from$500 million valuation to$2.4 billion is really, really impressive. And I think we're going to see this company continue to grow. I would definitely put Suno as one of the top companies that will continue to make some incredible things. And I think we'll probably see them strike deals similar to the one that UDO did with Warner Music Group, where they're going to start going directly to platforms and record labels so that you can create music trained off of actual artists and those artists will get a revenue split of it thank you so much for tuning into the podcast today if you enjoyed the episode make sure to subscribe wherever you get your podcasts and leave a review on spotify is the about tab and over on apple you can go and drop some stars i read them all i really do appreciate them i hope you have an amazing day and make sure to go check out aibox.ai if you want to try out all of the top AI models in one place.

10:03Hope you have a great day and I'll catch you in the next episode.