“Companies like Session42 and Aiode belong to a second wave of AI-MusicTech apps – they don’t infringe on rights, and don’t replace producers and musicians.”

“We wouldn’t invest in companies that infringe on copyrights, because apps like Sono go against the music,” says Yaniv Jacobi, Managing Partner at Horizon Capital. “These apps don’t create anything new from scratch; they rely on a catalog of existing songs. They remind me of the Napster music file-sharing app, which didn’t have much left after the entire world sued it. Companies like Session42 and Aiode belong to a second wave of apps that don’t go against the industry, don’t infringe on rights, and don’t replace producers and musicians.”

It took the music industry more than two decades to regain the scale it had at the end of the 1990s. In 1999, global recorded music revenues reached a peak of $22.3 billion, but declining sales of CDs and physical records, coupled with the rise of pirate downloads, shrank the market to $13 billion by 2014. It was only in 2021 that revenues from recorded music returned to their 1999 level, thanks to the popularity of streaming apps like Spotify.

Yet, just when it appeared that the music industry had solved its distribution issues, a new and equally significant challenge emerged: AI-based apps that can automatically create songs with lyrics and melodies. The most well-known and successful of these is the American, ultra-user-friendly Suno. All you need to do is enter a description of up to 200 words—specifying the musical style and desired theme—to receive a brand-new song complete with lyrics, vocals, and melody. Suno’s biggest competitor is Udio, which received investment from Andreessen Horowitz.

Today, apps like Suno and Udio are often seen as a casual gimmick primarily intended for creating personalized birthday songs or short clips to share on social media. However, according to an in-depth study commissioned by CISAC (the International Confederation of Societies of Authors and Composers) and published last month, within five years these tools could cut up to a quarter of music creators’ revenues. Even if an AI-written song doesn’t top the charts, the study still points to several ways AI-generated music could shave billions off the earnings of producers and music creators.

“When a computer imitates musicians today, the sound it produces is robotic and synthetic,” explains Aiode CEO Idan Dobrecki. “We’re actually creating a model of the guitarist’s mind, how they play and what their signature style is. Then the software listens to the song that needs guitar and produces something tailored to the player’s style. Producers will always prefer working with real musicians, but their costs are very high. We’re democratizing the process of working with musicians.”

According to Dobrecki, apps like Suno are far from replacing human musicians. “Suno targets the lowest common denominator,” he says. “It works in a generic way and gives the producer very little control over the final product. Such apps will flood the industry with songs, but the gap between their level and quality music will remain large.’”

Read Ofir Dor’s full article for The Marker: After overcoming piracy, the music industry now faces an even bigger threat: Artificial Intelligence.