A musician from North Carolina, Michael Smith, has been accused of using artificial intelligence (AI) and automated bots to fraudulently earn millions of dollars in streaming royalties. Smith allegedly generated billions of streams using AI-created songs and bots to trick platforms into paying out over $10 million in royalties over several years. This case marks the first of its kind handled by prosecutors in the U.S.

How the Scheme Worked

According to the charges, Smith collaborated with the CEO of an unnamed AI music company, starting around 2018. The company provided him with thousands of AI-generated songs monthly. Smith would then manipulate streaming platforms by using as many as 10,000 bot accounts to play these tracks, inflating the number of streams and royalties.

The AI-generated songs, often referred to as “instant music,” were specifically created to avoid detection. As the AI technology improved, it became even harder for streaming platforms to catch onto the scheme.

Authorities claim that Smith falsely reported his tracks had generated over 4 billion streams, resulting in over $12 million in royalties since 2019. If found guilty, he could face several decades in prison for wire fraud, conspiracy, and money laundering.

Platforms Fighting Back

Streaming platforms like Spotify, Apple Music, and YouTube prohibit users from artificially boosting streams to claim royalties. They have implemented new policies and detection measures to clamp down on this fraudulent practice. Spotify, for instance, now requires a minimum number of streams within a 12-month period before paying royalties and has introduced stricter measures against artificial streams.

The rise of AI tools that create music, text, images, and videos has sparked concern across creative industries. Many artists argue that AI-generated content, made using datasets often scraped from the internet, includes their work without permission or compensation. This has led to artists feeling their creative rights are being exploited.

In 2023, a viral track using cloned voices of artists Drake and The Weeknd was quickly removed from streaming platforms due to concerns over copyright infringement. The controversy around AI in music has led several prominent artists, including Billie Eilish and Elvis Costello, to call for stricter regulations to protect musicians from what they describe as the “predatory” use of AI in the industry.

Moving Forward

As AI continues to evolve, cases like Michael Smith’s raise important questions about the future of creative industries and the ethical use of technology. Streaming platforms are under pressure to improve detection systems, while artists and lawmakers push for stronger protections in an increasingly digital world.