US Musician Accused of Using AI and Bots to Scam $10 Million in Streaming Royalties

Michael Smith, a musician from North Carolina, has been accused of using artificial intelligence (AI) tools and thousands of bots to fraudulently inflate a number of streams on music platforms, netting him millions of dollars in royalties. Prosecutors announced this week that Smith, 52, faces charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy in what authorities say is first criminal case of its kind. 

Smith allegedly generated and streamed AI-created music tracks billions of times across platforms like Spotify, Apple Music, and YouTube, using automated bot accounts to evade detection. According to an indictment unsealed by the US Attorney’s Office for Southern District of New York, the scheme allowed Smith to collect over $10 million in royalties over several years. 

“Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and or rights holders whose songs were legitimately streamed,” told US attorney Damian Williams. 

AI-Generated Tracks and Bot Networks 

indictment details how Smith used AI-generated songs, supplied by the chief executive of an unnamed AI music company, to create a vast catalog of tracks. In collaboration with an executive, Smith allegedly operated as many as 10,000 active bot accounts to stream the songs and inflate a number of plays. 

AI music executive is said to have provided Smith with thousands of tracks monthly, in exchange for metadata like artist and song names, and a share of streaming revenues. In one 2019 email, an executive reportedly remarked, “Keep in mind what we’re doing musically here… this is not ‘music,’ it’s ‘instant music.'” 

investigation, led by the FBI, revealed that Smith’s “instant music” strategy evolved, making it more difficult for platforms to detect fraudulent activity. By February 2023, Smith claimed his AI-generated music had garnered over 4 billion streams, resulting in $12 million in royalties since 2019. 

AI’s Role in Fraudulent Schemes 

FBI emphasized that this case is part of a broader effort to crack down on misuse of technology to exploit the entertainment industry. ” FBI remains dedicated to plucking out those who manipulate advanced technology to receive illicit profits and infringe on the genuine artistic talent of ors,” said acting assistant director Christie M. Curtis. 

If convicted, Smith faces decades in prison for his involvement in the scheme. 

This case comes amid growing concerns about role of AI in the music industry. With AI-generated music tools becoming more accessible, many artists and record labels are worried that technology may be used to create tracks without proper compensation to original creators. This case highlights potential for AI to be misused not just for creative purposes, but for financial gain. 

Streaming Platforms Respond 

Major streaming platforms have long prohibited artificial methods of inflating streams. In April, Spotify announced changes to its royalty policies to combat fraudulent streams, including charging labels and distributors if artificial streams are detected and raising a number of streams required for royalty payments. YouTube and Apple Music have also taken steps to prevent bot-driven streaming practices. 

broader use of AI in music production and its implications have sparked debates in industry. Artists like Billie Eilish, Elvis Costello, and Aerosmith have voiced concerns over AI-generated music, calling for stricter regulations to prevent  “predatory” use of technology. 

As music world navigates impact of AI on creativity, cases like Michael Smith’s underscore need for vigilance in ensuring fairness in streaming royalties and copyright protections. 

1. Musician charged with using bots to boost streaming revenue  BBC.com
2. The Bands and the Fans Were Fake. The $10 Million Was Real.  The New York Times