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German Court Rules AI Music Firm Suno Violated Copyright Law

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A German court has ruled that AI music company Suno violated copyright law by processing songs from artists represented by Germany’s licensing agency Gema without authorization.

The Munich Regional Court ordered Suno to disclose revenue linked to the infringement and ruled that the company must pay damages, with the final amount to be determined. The decision can still be appealed.

The case involved music from several artists, including Alphaville, and is seen as part of a broader legal battle over the use of copyrighted works to train and develop AI systems.

Suno said it disagrees with the ruling and is considering all legal options, including an appeal.

Pershing Square bids $64B for Universal Music Group

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Pershing Square, led by billionaire investor Bill Ackman, has proposed a $64 billion takeover of Universal Music Group (UMG), marking a renewed attempt to gain control of the world’s largest music label.

The offer, structured as a mix of cash and shares, values UMG at about 30.40 euros per share, representing a 78% premium over its recent trading price. The proposal is nonbinding, and UMG’s board has confirmed it is under review.

Strategic Objective: U.S. Listing

A central element of the proposal is relocating UMG’s listing from Amsterdam to the United States. Ackman argues that a New York listing would:

  • Increase liquidity
  • Attract index funds
  • Improve valuation multiples

This aligns with his long-standing position that UMG is undervalued relative to peers like Spotify.

Ownership and Approval Constraints

The deal faces structural hurdles. Key shareholders include:

  • Bollore Group (~18.5% stake, dominant voting control)
  • Vivendi (~13.4%)
  • Tencent (significant minority stake)

Approval would require:

  • Board consent
  • Two-thirds shareholder approval
  • Regulatory clearance

Without support from these stakeholders, the transaction is unlikely to proceed.

Industry Context and Performance Pressure

Despite global music industry growth, UMG’s share price has underperformed since its IPO, losing roughly one-third of its value. Ackman attributes this to:

  • Underutilized capital structure
  • Strategic inefficiencies
  • Missed opportunities in investments such as its stake in Spotify

At the same time, the industry faces structural challenges:

  • Slowing streaming growth
  • Increasing competition from platforms like Apple and Amazon
  • Disruption from AI-generated music

AI Disruption Factor

Artificial intelligence is emerging as a material risk. Tools capable of generating music are:

  • Blurring the distinction between human and machine-created content
  • Triggering copyright and monetization concerns

A recent survey indicated that 97% of listeners cannot distinguish AI-generated songs from human-created ones, underscoring the scale of disruption.

Deal Structure

Under the proposal:

  • Shareholders would receive €9.4 billion in cash
  • Plus 0.77 shares in a new U.S.-listed entity
  • The merged company would be incorporated in Nevada and listed on the NYSE

The transaction is targeted to close by year-end, pending approvals.

Outlook

Ackman’s approach differs from traditional activist campaigns, combining cooperative tone with structural criticism. However, execution risk remains high due to:

  • Concentrated ownership
  • Governance resistance
  • Strategic disagreements with current management

The proposal effectively tests whether UMG’s current leadership model can coexist with public-market expectations for growth, transparency, and capital efficiency.

Sony lifts outlook after record quarterly profit as music and sensors shine

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Sony raised its full-year forecast on Thursday after posting a record quarterly operating profit, driven by strong performances in its image sensor and music divisions and supported by a weak yen, even as sales of its PlayStation 5 console declined.

Operating profit climbed 22% to 515 billion yen ($3.3 billion), beating market expectations by 9%, according to LSEG data. The company also increased its full-year operating profit outlook by 8% to 1.54 trillion yen. Sony has steadily shifted away from traditional consumer electronics toward entertainment and components, though its shares have recently come under pressure as investors question its next long-term growth engines.

Sales of Sony’s image sensors, widely used in smartphones, rose 21%, benefiting from strong demand and favorable currency movements. The company’s music division also delivered solid growth, with revenue rising 13% on the back of streaming, live events and merchandising across recorded music. The business represents a key pillar of Sony’s earnings stability as digital consumption continues to expand globally.

Sony also announced an expansion of its share buyback program, increasing the planned amount to 150 billion yen from 100 billion yen previously, offering additional support to shareholder returns.