AI music startup Suno has secured a $250 million Series C funding round at a $2.45 billion post-money valuation, according to a Wednesday announcement. The round was led by Menlo Ventures, with participation from Nvidia’s venture arm NVentures, Hallwood Media, Lightspeed, and Matrix. The company, which enables users to generate full songs from simple text prompts, has now reached $200 million in annual revenue, according to The Wall Street Journal. Suno offers a freemium model with consumer subscriptions at $8 or $24 per month, and launched a commercial version for creators in September. Its rapid growth has been driven largely by word-of-mouth, with users sharing AI-generated tracks via group chats and social platforms—something Menlo Ventures highlighted in its investment blog, calling the shift from passive music listener to active creator “transformative.” Despite its success, Suno remains at the center of a growing legal battle over AI training data. The company is facing a high-profile lawsuit filed by three major record labels—Sony Music Entertainment, Universal Music Group, and Warner Music Group—accusing Suno of training its models on copyrighted music scraped from the internet without authorization. These cases remain in a legal gray area in the U.S., though many have been resolved through licensing agreements. Last month, Universal Music settled its lawsuit with AI music platform Udio, setting a precedent for future deals. Suno also faces similar challenges from music rights organizations in Europe, including Denmark’s Koda and Germany’s GEMA. Notably, GEMA recently won a landmark ruling against OpenAI in Germany, reinforcing concerns about the legality of training AI on publicly available copyrighted content. Yet despite these legal hurdles, investors remain confident in Suno’s potential. The company previously raised $125 million in a Series B round in May 2024 at an estimated $500 million valuation, led by Lightspeed Venture Partners, Nat Friedman, Daniel Gross, Matrix, and Founder Collective. The continued influx of capital into Suno reflects a broader trend in Silicon Valley: while legal questions around AI training data remain unresolved, the market for AI-generated content is already thriving. Investors are betting that the industry will eventually work out compliance frameworks—whether through licensing, regulation, or technological innovation—while the technology itself continues to disrupt creative industries. For now, the era of AI music is not just coming—it’s here.