A singer from the United States has been accused of manipulating music streaming platforms using AI technologies and bots to fraudulently inflate his stream statistics and earn millions of dollars in royalties.
Michael Smith, 52, from North Carolina, faces charges of wire fraud, conspiracy to commit wire fraud and money laundering.
According to the BBC, authorities allege that this is the first time AI has been used to allow such a large-scale streaming scam.
U.S. Attorney Damian Williams emphasised the scope of the fraud, claiming that Smith took millions of dollars in royalties that should have gone to real musicians, songwriters and rights holders.
The accusations stem from an unsealed indictment alleging that Smith distributed hundreds of thousands of AI-generated songs across multiple streaming platforms.
To avoid detection, automated bots streamed the tracks—sometimes up to 10,000 at a time. Smith allegedly earned more than $10 million in illegal royalties over several years.
The FBI played a crucial role in the investigation. The agency’s acting assistant director, Christie M. Curtis, explained that the agency was dedicated to tracking down those who misuse technology to rob people of their earnings while simultaneously undermining the efforts of real artists.
According to the indictment, Smith began working with the CEO of an undisclosed AI music firm around 2018.
This co-conspirator allegedly provided Smith with thousands of AI-generated tracks each month. In exchange, Smith offered metadata such as song titles and artist names, and offered a share of streaming earnings.
One email exchange between Smith and the unnamed CEO in March 2019 demonstrates how the plot took shape.
The executive stated, “Keep in mind what we’re doing musically here…this is not ‘music,’ [but] ‘instant music’).” The email emphasises the operation’s intentional nature, as well as the use of AI to generate large amounts of content with minimal effort.
According to the indictment, the technology improved over time, making it harder for streaming platforms to detect fraudulent streams.
In another email dated February, Smith boasted that his AI-generated tracks had accumulated over 4 billion streams and $12 million in royalties since 2019. If convicted, Smith faces significant prison time for the charges brought against him.
The Smith case is not the only one involving bogus music streaming royalties. Earlier this year, a Danish man received an 18-month term for a similar plan.
Music streaming platforms like Spotify, Apple Music and YouTube forbid bots and artificial streams from being used to boost royalties.
Such behaviour is disruptive and illegal, and platforms have taken steps to combat it through policy changes. For instance, if artificial streams are detected, Spotify charges the label or distributor and music can earn royalties only if it meets certain criteria.
Nevertheless, the proliferation of AI-generated music continues to disrupt the music industry.
Musicians and record companies fear they will lose revenue and recognition due to AI tools capable of creating music, text and images. Such tools reportedly sometimes use content that musicians and other creators have posted on the internet, raising questions about copyright infringement.
Tension came to a head in 2023 when a track that mimicked the voices of popular artists Drake and The Weeknd went viral, prompting streaming platforms to remove it.
Earlier this year, several high-profile musicians, including Billie Eilish, Elvis Costello and Aerosmith, signed an open letter urging the music industry to address the “predatory” use of AI to generate content.
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