A 52-year-old North Carolina man, Michael Smith, has been arrested and charged with wire fraud conspiracy, wire fraud, and money laundering conspiracy for allegedly using artificial intelligence-generated music and bots to steal millions of dollars in royalties from streaming services.
According to an indictment unsealed on Wednesday, Smith created thousands of bots to stream hundreds of thousands of AI-generated songs on platforms such as Spotify, Apple Music, and YouTube Music. The bots were programmed to play the songs billions of times, generating over $10 million in royalties for Smith since 2017.
Prosecutors claim that Smith initially uploaded his own music to streaming services but soon realized that his catalog was not large enough to generate significant royalties. He then turned to AI-generated music in 2018, working with two unnamed co-conspirators – the CEO of an AI music company and a music promoter – to create hundreds of thousands of songs.
The indictment alleges that Smith provided phony names and fake account details to streaming services while setting up the bots, and agreed to rules that ban streaming manipulation. He allegedly deceived the services by making it seem like the bot accounts were legitimate, when in fact they were programmed to stream his music billions of times.
Smith is also accused of attempting to cover his tracks by using dummy email addresses and VPNs, and telling his co-conspirators to be “undetectable.” US Attorney Damian Williams stated that Smith’s scheme was a “brazen fraud” that stole millions of dollars in royalties from musicians, songwriters, and other rights holders.
The case highlights the contrast between Smith’s alleged scheme and the legitimate efforts of musicians like Matt Farley, who has written, recorded, and uploaded tens of thousands of songs to streaming services about various topics. Farley’s practice appears to be entirely above board, and he has reportedly earned around $200,000 from his music in 2023.
