Suno, one of the AI music generation platforms facing legal battles with copyright holders, announced last Wednesday (November 19) that it had raised $250 million in a Series C funding round that valued the company at a jaw-dropping $2.45 billion.
The lead investor was Menlo Ventures, a long-running venture capital fund that helped fund numerous known tech brands like Roku and Hotmail (before it was acquired by Microsoft), and more recently turned its focus on AI companies like Anthropic.
But another, less-mentioned, investor could be of more interest to the music business – because of what its involvement means for the music industry’s relationship with AI.
That investor is Hallwood Media, the music company founded in 2020 by Neil Jacobson, the former President of Universal Music Group’s Geffen Records.
In an Instagram post published over the weekend, Danny Jacobson, Hallwood’s Head of A&R, wrote: “Meet Hallwood Media Ventures (HMV). And if you’re not familiar with SUNO, please meet one of the most important companies in music (and the fastest growing tool/workstation for Songwriters, Producers and Artists). We’re proud to have participated through their recent Series C round.”
In addition to Managing Partners Todd Lowen and Neil Jacobson, Hallwood Media Ventures, the company’s investment arm, is led by a few other UMG alumni, including Universal’s ex-CFO Chuck Ciongoli and ex-EVP Mike Biggane, who also served as Spotify’s Head of Global Curation.
Another team member listed on Hallwood Media Ventures’ website, who’ll be familiar to many in the music industry, is Paul Hourican, formerly Global Head of Music Operations at TikTok.
Simply put, Hallwood is staffed by some very well-connected music insiders – and the company is all in on AI-generated music. Earlier this year, it established itself as a trailblazer in the legitimization of AI music within the industry when it signed Imoliver to a record contract.
Why is that a big deal? Because Imoliver isn’t an artist – or at least not the way most people would think of a music artist. He is the most-streamed “music designer” (to use Hallwood’s term) on Suno’s AI platform, who “uses the AI-powered platform to develop his lush sonic landscapes.”
“It’s a sign the industry is ready to embrace new ideas and new ways of creating,” Imoliver said. “This isn’t about replacing artists, it’s about expanding what’s possible.”
Perhaps more alarming to traditional artists is what Neil Jacobson had to say about the deal.
“Imoliver represents the future of our medium,” Jacobson declared.
“Imoliver represents the future of our medium.”
Neil Jacobson, Hallwood Media
Those who fear AI is a threat to the music industry can take some heart in the fact that Imoliver – now a verified artist on Spotify – has so far struggled to wow audiences in the broader music world like he did on Suno’s platform.
His label debut single, Stone, has clocked around 13,500 plays in the month it’s been out – far short of the 3 million-plus plays it clocked on the Suno platform.
But another Hallwood-signed act, the AI-generated Xania Monet, recently became the first “AI-powered artist” to chart on one of Billboard’s airplay charts.
Both the Xania Monet avatar and her music are AI inventions, the work of Telisha “Nikki” Jones, who fed a poem she wrote into – you guessed it – Suno, and out came How Was I Supposed To Know?, which went viral on TikTok before it hit No. 1 on Billboard’s Digital Song Sales chart. It even reached No. 20 on the Hot R&B Songs chart, though it fell out of that chart in its second week.
Xania Monet now has 1.4 million monthly listeners in Spotify, where How Was I Supposed To Know? has cracked 7 million streams.
In an interview with the Wall Street Journal, Jones explained that she used Suno to put her poem to music because her singing voice, in her estimation, isn’t up to the task.
“I grew up singing in church, but I can’t do vocals as powerful as what I created with Xania,” she said.
On the back of her chart success, Jones scored a reported multi-million-dollar record deal. Who with?
Hallwood Media.
The reaction from some corners of music and media was swift and unequivocal.
In a post on TikTok, singer Kehlani declared that “no one will ever be able to justify AI to me… I’m sorry, I don’t respect it.” The Guardian, meanwhile, described Xania Monet as “the latest digital nightmare to emerge from a hellscape of AI content production.”
There’s also the fact that Suno is facing multiple copyright infringement lawsuits over its alleged use of copyrighted music to train its AI models.
If the copyright holders are right about that (and they almost certainly are, given that Suno has pretty much admitted to using copyrighted music without authorization), then these Hallwood-signed artists have created music using a technology that ripped off other artists, without credit, permission, or payment.
Meanwhile, AI music is beginning to break into the wider music scene.
As MBW reported earlier this year, some AI “artists” are generating big numbers on streaming services. Country act Aventhis, with songs created by Suno and Riffusion, has around 1.3 million listeners on Spotify, while The Devil Inside has around 250,000 – down from 700,000 earlier this year.
And there are plenty of others. In an article published at the end of last month, Billboard counted six AI artists to have broken onto its charts in the just prior few months.
But the question remains: How large is the market for AI music? Hallwood is clearly betting that it’s large enough to justify seven-figure record deals – and an investment in a legally questionable business model.
Yet on a recent earnings call, UMG Executive Vice-President and Chief Digital Officer Michael Nash said the company’s research showed a limited appetite for AI-generated artists among listeners.
“The readout was 50% of music consumers are very interested in AI in relationship to the music,” Nash said.
“But that’s in relationship to their music experience. The thing that ranks the lowest is artist simulation, what we would call ‘fake artists’. And you’re seeing there’s a lack of traction around that other than the occasional novelty phenomenon that may capture some headlines.
“That’s not what fans are interested in.”
“You’re seeing there’s a lack of traction around [AI artists] other than the occasional novelty phenomenon that may capture some headlines. That’s not what fans are interested in.”
Michael Nash, Universal Music Group
It may turn out to be that AI-generated artists are just a “novelty phenomenon,” but one thing that appears to be here to stay is the licensing of AI music generators.
In recent weeks, Udio settled its copyright lawsuits with both UMG and Warner Music Group, with both companies striking licensing deals with the AI company for a platform set to launch in 2026. Udio’s UMG announcement mentioned that Udio will become a “walled garden,” with its music shareable only on the platform.
Given the recent investments and signings by Hallwood, it seems Suno isn’t headed in the same direction.
From one perspective, the recent licensing deals between major record companies and AI platforms are a sign that AI developers are growing up, and finally deciding to do things the legitimate way. But from another perspective, we are witnessing the legitimization of AI-generated music, and its induction into the music industry proper.
Concerns of human artists about AI aren’t likely to go away anytime soon.Music Business Worldwide
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source www.musicbusinessworldwide.com ’
