Suno funding round

Photo Credit: Giorgio Trovato

AI music generator Suno is reportedly in talks to raise another $100 million – this time at a whopping $2 billion valuation.

As many will recognize, this valuation is a full four times greater than that attached to the Cambridge-headquartered company at the time of its May 2024 round. Technically, the latter brought $125 million in fresh funding, though Bloomberg, citing anonymous sources, has placed the reportedly forthcoming round at “over $100 million.”

Unsurprisingly, given the reliance on said sources, Suno itself hasn’t come out and confirmed the raise details. But the same sources pointed as well to a cool $100 million or so in annual recurring revenue for Suno, which only set sail in 2022.

That figure and the gargantuan valuation are certainly worth keeping in mind amid high-stakes music-world copyright lawsuits against Suno. Those suits include an action levied by the majors and a separate artist-led complaint, both of which were recently updated with “stream-ripping” allegations.

And as we reported, the updates followed mixed-bag rulings on the all-important question of whether training gen AI models on protected works without authorization constitutes fair use.

In late June, Meta scored a summary judgement win in an author-spearheaded infringement action – albeit due to the perceived shortcomings of the plaintiffs’ arguments, not a decisive triumph on the training side. And prior to settling a different case with authors for allegedly pirating books en masse, Anthropic was cleared for its actual training processes.

Stated differently, the new claims against Suno as well as Udio seemingly shifted the focus to a distinct (and, regarding the plaintiffs’ arguments, more concrete) form of liability. Time will tell whether the cases head to trial, but settlement-discussion rumblings surfaced months before the retooled suits arrived.

More immediately, with the WavTool owner Suno reportedly pulling down $100 million in revenue, public concerns about machine-made media or not, there’s apparently some demand for AI music generation.

Against this backdrop, the majors and others are also looking to cash in on the craze outside the courtroom. Last week alone saw the majors’ publishing units unveil “trial agreements” with lyrics provider Musixmatch, shortly before Universal Music, Sony Music, Warner Music, Believe, and Merlin alike inked gen AI partnerships with Spotify.

It remains to be seen what exactly the Spotify pacts mean from a revenue perspective and from the streaming-experience angle. Deezer is already registering a staggering 30,000 or more AI track uploads per day. Even if the quick-growing daily total somehow stayed flat, an astonishing 11 million AI works would inundate DSPs on a yearly basis.