Merlin and Udio Unite in Landmark AI Licensing Deal for Indie Artists

Merlin and Udio officially announced a landmark licensing partnership on January 20, 2026. Merlin, which represents roughly 15% of the global recorded music market through thousands of independent labels and distributors, has established a formal framework for its members to license their catalogs for AI model training. This deal follows Udio’s high-profile settlements with Universal Music Group and Warner Music Group in late 2025, effectively ending a cycle of litigation and moving toward a fully licensed "closed system" platform set to launch later this year.

The partnership is built on a strictly opt-in basis, ensuring that independent rightsholders maintain total control over whether their music is used to train Udio’s generative models. In a joint statement, Merlin CEO Charlie Lexton emphasized that the deal is designed to ensure "consent and fair remuneration," rather than simply reacting to AI’s encroachment on the industry. For Udio, the agreement is a strategic win as it seeks to build a legitimate, artist-sanctioned ecosystem where fans can create remixes and custom tracks using authorized voices and styles. With Merlin on board, Sony Music remains the final major holdout in Udio’s quest for total industry alignment.

Safeguarding the Indie Spirit: Merlin’s Role in a Digital World

To understand the weight of this deal, one must look at the history of Merlin as the "virtual major" label. Founded in 2007 by independent stalwarts like Martin Mills (Beggars Group) and Michel Lambot (PIAS), Merlin was created to give independent artists the same seat at the table as massive corporations. Before Merlin, indie labels often struggled to negotiate fair rates with emerging tech giants; today, the organization ensures that its members—including iconic labels like Ninja Tune, Sub Pop, and Domino—receive premium terms on platforms ranging from Spotify and Apple Music to TikTok.

This new Udio agreement represents the second significant AI foray for the organization, following a 2025 partnership with ElevenLabs. By securing a deal with Udio, Merlin is effectively future-proofing the independent sector against data scraping and unlicensed training. For nearly two decades, Merlin has successfully navigated the shift from physical sales to downloads and then to streaming; now, as the industry faces the generative AI frontier, the organization is once again acting as a protective barrier, ensuring that the "human artistry" of the indie world is compensated and respected in the age of the algorithm.