2024 has been nothing short of a watershed year for the intersection of artificial intelligence and music. Basically, just like the year before but a bit more eventful. From funding rounds to lawsuits, AI-generated hits, and government crackdowns, the past year has seen the rapid evolution of what music creation and consumption can mean in the digital age.
Tech startups like Suno and Udio have raised the bar by sparking both investor enthusiasm and legal fury. Meanwhile, OpenAI’s release of its AI video tool, Sora, has reignited debates about the role of machine creativity versus human artistry. And it’s not just the innovators or investments making headlines this year; iconic artists like Paul McCartney and Billie Eilish have also called for stricter boundaries on AI’s reach into the creative process.
In this roundup, we unravel the key moments that defined AI in music this year—from Grammy nominations for AI-assisted tracks to federal charges over streaming scams and pioneering legislation designed to curbing AI impersonation.
Suno Raises $125 Million in Funding
Suno, an AI-powered music creation platform launched in late December 2023, has had an eventful year. By mid-2024, it wasn’t just making noise—it was the noise. Following a Rolling Stone feature that catapulted the company into the spotlight, Suno became the name to beat in AI music innovation, outshining rivals like Udio. Suno, unlike many similar text-to-music tools that couldn't do better than churning out primitive tunes, promised—and delivered—entire compositions with lyrics, vocals, melodies, and instrumentals, all generated in mere clicks. And honestly, some of them sound so good it's hard to believe they weren't made by production pros.
The buzz caught the attention of investors. Heavyweights such as Lightspeed Venture Partners, Matrix Partners, Nat Friedman, Daniel Gross, and Founder Collective opened their wallets fast enough. By May 2024, Suno announced it had raked in $125 million across several funding rounds. This was no small feat—it marked the largest single investment in a music AI startup to date and the most significant cash infusion into music-tech in over three years.
Behind the fanfare, though, Suno has been training its model on copyrighted material—a red flag for the music industry which, however, didn't make investors hesitate. Antonio Rodriguez, one of Suno’s backers, shrugged off the looming threat of lawsuits in an interview with Rolling Stone, saying, "Honestly, if we had deals with labels when this company got started, I probably wouldn’t have invested in it. I think that they needed to make this product without the constraints."
Read also: Music Tech, Despite Not Grabbing Headlines, Continues to Attract More Investment Each Year
Suno & Udio Hit a Sour Note with Major Labels
What happened next was bound to happen. By June 2024, whispers of legal action against AI music darlings Suno and Udio turned into a full-blown chorus. Billboard first reported that major record labels were considering teaming up for a lawsuit. Four days later, they did exactly that. Warner Music Group, Sony Music Entertainment, and Universal Music Group filed suit accusing the startups of copyright infringement on a scale so massive it bordered on science fiction.
The labels didn’t mince words. In their complaint, they claimed Suno and Udio’s AI-generated tracks were flooding the market with machine-made imitations, threatening to “cheapen and drown out” authentic recordings—the very works these companies allegedly used to train their models without permission.
The lawsuits, filed in federal courts in Massachusetts and New York, claimed Suno and Udio had mined tracks from Mariah Carey, Michael Jackson, and ABBA to teach their algorithms how to mimic human creativity. The Recording Industry Association of America (RIAA), representing the labels, called it unlicensed copying “at an almost unimaginable scale.”
But the accused weren’t exactly caught off guard. Both Suno and Udio openly admitted to using copyrighted material for training. Claiming it was fair use. According to the companies, their models analyse patterns and styles, not the recordings themselves. It’s an argument that hinges on a legal grey area, one that the courts may soon illuminate.
The labels, however, aren’t interested in nuance. They’re demanding injunctions to stop Suno and Udio in their tracks and financial damages that could reach $150,000 per infringed work if the violations are deemed wilful.
Sora Release & Backlash That Followed
In December 2024, OpenAI unveiled its long-awaited AI video generator, Sora, to the public. The release promised to push the boundaries of what artificial intelligence can create. And it did. What it also did, however, was spark a firestorm of criticism, particularly from artists worried about what those boundaries might mean for their livelihoods.
Sora officially debuted on December 9, 2024, after an exclusive alpha testing phase where selected artists and filmmakers had an early crack at the tool. The final product lets users conjure up 20 seconds of high-definition video from simple text prompts. OpenAI proudly boasted of its upgraded speed and photorealistic quality, framing the tool as a glimpse into the future of video creation.
That glimpse didn’t sit well with everyone. Many protested that the tool could disrupt the creative world in ways that aren’t exactly helpful. In late November, things escalated when some testers leaked the tool online, apparently to draw attention to what they saw as OpenAI’s disregard for the artistic community.
Critics claimed that tools like Sora threaten jobs in creative industries and undermine the value of human artistry. Then there’s the copyright quagmire: artists worry their work might have been scooped up as training data without consent, let alone compensation. OpenAI hasn’t exactly squashed those fears.
The Beatles’ AI-Powered Comeback Hits Grammy Stage
The Beatles were back in the headlines this year, and this time it’s not just nostalgia doing the heavy lifting. Their newly released track, Now and Then, has snagged two Grammy nominations for 2025: Record of the Year and Best Rock Performance. Not the Beatles' nomination but the song’s use of artificial intelligence is what made many buzz—a first for a Grammy contender, and a development that’s as fascinating as it is divisive.
Now and Then isn’t exactly new. It started as a John Lennon demo from the late 1970s, a rough recording abandoned because the tech of the time couldn’t cleanly separate Lennon’s vocals from the piano track. In 2024, Paul McCartney and Ringo Starr decided to dust off the track, finishing it with a little help from AI. This AI tool, allegedly stem separation tech like the ones of Moises, LALAL.AI or AudioShake, served more as an audio editor, isolating and enhancing Lennon’s voice so the remaining Beatles could work their magic.
The Grammy Awards ceremony, set for February 2, will reveal whether Now and Then can clinch the coveted trophies.
North Carolina Musician Charged in $10 Million AI Streaming Scam
Federal prosecutors were making headlines this year with their first-ever streaming fraud case, charging Michael Smith, a 52-year-old musician from North Carolina, with using AI-generated music to pocket more than $10 million in fraudulent royalties.
Smith is accused of creating hundreds of thousands of songs with the help of an unnamed AI music company. Federal prosecutors allege that Smith didn’t just stop at generating the songs; he recruited an army of bots to stream his creations on repeat.
How effective was it? Prosecutors say Smith’s operation churned out more than 661,000 streams daily, enough to rake in $1.2 million in royalties annually. That’s a lot of zeros, even for a guy whose musical output consisted of AI-assisted gibberish.
According to the indictment, Smith had help on the creative front. He reportedly partnered with Alex Mitchell, the CEO of an AI music company, to crank out songs at scale. Billboard later unearthed hundreds of tracks where Mitchell was listed as a co-writer alongside Smith. Mitchell, for his part, said his company was blindsided by the indictment, insisting that Smith had always presented himself as aboveboard.
On September 4, 2024, US Attorney Damian Williams announced charges against Smith, which include wire fraud conspiracy, wire fraud, and conspiracy to commit money laundering. Each charge carries a potential sentence of up to 20 years in prison, though Smith pleaded not guilty and was released on a $500,000 bail.
Streaming giants, unsurprisingly, are eager to distance themselves. Spotify claims it accounted for less than 1% of Smith’s fraudulent royalties and has highlighted its ongoing investments in fraud prevention. Yet the case raises broader concerns about how streaming platforms—built to reward volume—might be incentivising scams.
Tennessee's ELVIS Act & the Federal NO FAKES Act Take a Stand Against AI Impersonation
Tennessee passed the ELVIS Act in March 2023, updating and expanding publicity rights in a way that leaves no wiggle room for AI trickery. The state’s Ensuring Likeness Voice and Image Security Act of 2024—yes, that spells ELVIS—officially took effect on July 1, 2024, and it's already making waves in the music industry.
The ELVIS Act marks the first time Tennessee has explicitly included “voice” under its publicity rights protections. This means that both human and AI-generated versions of someone’s voices are off-limits without consent. Violators face the threat of lawsuits or even criminal charges, which can land them a Class A misdemeanour, with penalties including fines and possible jail time.
Meanwhile, on the federal level, lawmakers were working on the NO FAKES Act, introduced on July 31, 2024. This bipartisan bill would establish national protections against AI-generated deepfakes and impersonations. If passed, it would mean the first federal recognition of the so-called right of publicity, a patchy legal concept currently governed by a mishmash of state laws.
Musicians Push Back Against AI
The past months have seen a wave of dissent rippling through the music world as artists and songwriters rally against the encroachment of artificial intelligence in their domain. In April 2024, the Artists Rights Alliance published an open letter that quickly became a rallying cry for human artistry. Signed by over 200 artists, including Katy Perry, Billie Eilish, Nicki Minaj, and Jon Bon Jovi, the letter didn’t mince words. It accused AI developers of using technology to “infringe upon and devalue” artists’ rights while calling for a halt to practices that undermine human creativity.
While acknowledging AI’s potential as a creative tool, the letter warned against its misuse. The issue, signatories said, isn’t the existence of AI but the lack of boundaries around its role in the creative process.
Later this year, Kate Bush joined Paul McCartney, ABBA’s Björn Ulvaeus and Radiohead’s Thom Yorke, who all signed the petition back in October alongside 11,500 others, including Kevin Bacon, Julianne Moore, Kazuo Ishiguro and Robert Smith, balling the unauthorised use of artists’ work for AI training a “major, unjust threat.”
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