OpenAI Charges Into $2.8 Billion AI Music Arena, Challenging Suno and Google’s Dominance

OpenAI just dropped the beat on the AI music industry—and competitors are scrambling to keep up.

The New Sound of Competition

With a massive $2.8 billion market up for grabs, OpenAI's entry threatens to disrupt Suno's early lead and Google's established presence. This isn't just about generating melodies—it's about controlling the future soundtrack of digital content.

Why This Hits Different

Traditional music production costs skyrocket while AI composition slashes expenses by up to 90%. OpenAI's move signals that text-to-music technology will soon become as ubiquitous as streaming services—and potentially as profitable.

The Investor Angle

While VCs scramble to find the next audio unicorn, remember this: most AI music startups will crash harder than a drummer after three energy drinks. But the ones that survive? They'll mint digital royalties for decades.

OpenAI's play proves that artificial intelligence isn't just coming for writers and artists—it's tuning up to dominate the entire creative economy.

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The step puts OpenAI in a growing market for AI music. Suno, one of the main names in the field, now makes about $150 million in yearly recurring revenue and may raise more than $100 million at a $2 billion value. Google’s parent company, Alphabet (GOOGL) (GOOG), also entered the space with Lyria RealTime, a model that can mix and shift genres in real time through its Gemini API. According to industry data, the AI music market was worth $440 million in 2023 and could rise to $2.8 billion by 2030.

Rising Competition and Legal Pressure

Competition in this area is growing fast. OpenAI’s MOVE brings more attention to how music is made with AI and how rights are handled. The largest music labels – Universal Music Group (UMGNF), Warner Music Group (WMG), and Sony Group (SONY) – have already sued Suno and another startup called Udio. The labels claim those companies trained their AI models using copyrighted recordings without approval. They also say some platforms removed music from YouTube for violating its anti-piracy rules.

In addition, a group of artists in Illinois has filed lawsuits against AI firms for using lyrics from online databases such as Genius and AZLyrics. The International Confederation of Music Publishers called it the biggest case of intellectual property misuse in modern times. These legal fights are raising questions about how AI music tools should obtain their data and what constitutes fair use.

Meanwhile, streaming services are seeing more AI-made songs each day. French platform Deezer said that 28% of all daily song uploads are now fully AI-generated, equal to more than 30,000 new synthetic tracks daily. It also found that up to 70% of streams from AI content may be fake, which adds new challenges for the industry.

A Fast-Moving Space With Unclear Rules

OpenAI’s tool could help creators make music more quickly and at a lower cost. It could also change how songs are produced for social media, games, and films. Yet, as with many AI products, questions remain about ownership, rights, and profit-sharing. For now, the company has not said when the tool will be released or how it will be priced.

The growing demand for AI-generated music shows that the market is ready for new tools. However, the industry still needs clear rules on how to protect the work of artists and labels. Investors and creators will both be watching how OpenAI and its rivals handle those issues in the months ahead.

Using TipRanks’ Comparison Tool, we’ve lined up and compared all the tickers mentioned in the piece. It’s a useful tool for investors who wants to gain a broader perspective on each stock and the music industry as a whole.