AI music startup Udio and independent publisher Kobalt have announced a strategic partnership aimed at developing new revenue streams for Kobalt’s artists and songwriters. This collaboration signifies a pivotal change for Udio, transitioning from utilizing unlicensed content to a fully licensed model.

A Shift Towards Licensed AI Music

The partnership with Kobalt is Udio’s third major agreement with a major music industry player since November 2025, following similar deals with Universal Music Group (UMG) and Warner Music Group (WMG). These agreements allow Udio to license works for training its AI models, with artist and songwriter participation remaining voluntary.

From Controversy to Collaboration

Udio initially faced legal challenges from UMG, WMG, and Sony Music for using copyrighted music without licenses to train its AI models. The partnerships with UMG and WMG have resolved those lawsuits, though Sony Music continues to pursue its legal claim. This transition demonstrates Udio’s commitment to addressing copyright concerns and working within the established music industry framework.

New Revenue Streams for Artists

The collaboration with Kobalt is designed to benefit the thousands of songwriters, artists, producers, and publishers associated with the company. While specific details regarding the new revenue streams and opt-in processes for songwriters haven’t been released, the partnership aims to provide new opportunities in the evolving AI music landscape.

Looking Ahead

The deal, subject to regulatory approval, is expected to be finalized in the latter half of 2026. Kobalt emphasized its dedication to protecting its clients while exploring new technological opportunities. Udio expressed excitement about welcoming Kobalt’s community and expanding creative possibilities through AI, ensuring artists are appropriately compensated for their work.