UMG-Backed Music IP Holdings Licenses AI Music Patents to Udio and GRAI, Paving Way for Responsible AI Creation

On August 20 2026, Universal Music Group’s new intellectual‑property arm, Music IP Holdings (MIH), announced a landmark licensing deal that could reshape how AI‑generated music is created, distributed and monetised. The company, formed last year through a partnership between UMG and the IP firm Liquidax, has granted a portfolio of more than 24 patents to two AI‑music platforms, Udio and GRAI.

The patents cover a range of core functions essential to the AI music workflow: creation, moderation, watermarking, licensed distribution and revenue generation. MIH also says the portfolio tackles how AI systems learn from and produce derivative content, extending beyond music to video and voice. According to MIH statements, the collection enables a standard that lets creators generate, track and secure new AI revenue streams while offering tools to manage unauthorized AI outputs.

"These patents were designed to create new opportunities for responsible innovation while giving artists, songwriters and right‑holders stronger protections and the ability to share in the value their work creates," said MIH CEO Daniel Drolet. He added that the collection allows creators to maintain control over their work in the AI ecosystem.

Udio CEO Andrew Sanchez highlighted how the partnership will embed safeguards into the platform’s infrastructure. "We’re working with MIH to protect artists and establish guardrails so that AI amplifies human creativity," Sanchez said. Meanwhile, GRAI co‑founder Ilya Liasun explained that the platform’s social streaming service will credit and pay original artists every time a user incorporates an element of their song. The licensed patents make that real‑time royalty tracking possible.

MIH COO Paul Ketchel told Variety that the portfolio is not limited to music. "It’s anything that’s an AI derivative," he said. The patents cover how AI learns, consumes and produces derivative content across multiple media. UMG’s executive vice president for strategic technology, Chris Horton, echoed this vision. "The patents reinforce the company’s strategy to put artists and songwriters at the center of the next era of music," Horton said. He added that the partnership with MIH, music companies and responsible technology firms aims to build an AI music ecosystem that works for everyone, especially the creative community.

The licensing agreements were announced on August 20 2026, and Udio and GRAI were the first companies to receive the patents. Their selection was influenced by preexisting relationships with UMG. Ketchel said the goal is to create an ecosystem that includes labels, publishers, movie studios and other creative stakeholders, allowing them to operate within a framework that compensates creators properly and reduces the need for one‑off lawsuits.

This move sits squarely in UMG’s expanded patent strategy focused on AI music derivatives. By providing a clear legal and technical framework, the company hopes to standardise how AI‑generated content is handled, ensuring that rights holders receive recognition and payment while enabling developers to build new services.

The announcement comes amid growing industry attention to the legal and ethical challenges of AI‑generated music. With more platforms offering instant composition tools, the need for robust licensing mechanisms has become urgent. The MIH patents represent a concrete step toward that goal.

At present, the patents are licensed exclusively to Udio and GRAI. No further licensees have been announced, and the companies have not disclosed plans to expand the licensing program.

The partnership illustrates how major music rights holders are actively shaping the infrastructure that will govern AI‑generated content. By aligning legal protection with technological innovation, UMG and MIH aim to create a sustainable model for creators and developers alike. The current status is that Udio and GRAI are operating under the MIH‑licensed framework, and the industry will watch how this model influences other AI music services and the broader licensing landscape.