Vithanage Erandi Kawshalya Madhushani Jade Times Staff
V.E.K. Madhushani is a Jadetimes news reporter covering Technology.
Michael Smith Allegedly Used AI-Generated Tracks and Automated Bots to Claim Millions in Royalties
A musician in the United States, Michael Smith of North Carolina, has been accused of orchestrating a scheme involving artificial intelligence (AI) tools and thousands of bots to fraudulently stream songs billions of times, ultimately claiming millions of dollars in royalties. Smith faces charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy, marking the first case of its kind for the prosecutors involved.
"Through his brazen fraud scheme, Smith stole millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed," said US Attorney Damian Williams.
According to an unsealed indictment, Smith, 52, utilized hundreds of thousands of AI generated songs to manipulate streams across multiple platforms. He employed thousands of automated bot accounts to stream these tracks billions of times, evading detection and claiming over $10 million in royalty payments over several years.
Prosecutors, along with the FBI, conducted an investigation leading to Smith’s indictment. Christie M. Curtis, acting assistant director of the FBI, emphasized the agency’s commitment to targeting those who exploit advanced technology for illicit profits, infringing upon the work of genuine artists.
The indictment reveals that Smith operated up to 10,000 active bot accounts at certain points to stream AI generated tracks. His alleged partner in this scheme was the chief executive of an unnamed AI music company, who began supplying him with thousands of tracks per month in exchange for metadata and a share of the streaming revenue starting around 2018. In a 2019 email disclosed in the indictment, the executive referred to the tracks as "instant music," underscoring the lack of artistic integrity involved.
Further emails obtained during the investigation suggest that the technology used to create the tracks became more sophisticated over time, making it increasingly difficult for platforms to detect fraudulent streams. In a February email, Smith claimed that his "existing music has generated at this point over 4 billion streams and $12 million in royalties since 2019."
If found guilty, Smith faces decades in prison. This case follows a similar incident earlier this year in Denmark, where an individual received an 18 month sentence for fraudulently profiting from music streaming royalties.
Music streaming platforms like Spotify, Apple Music, and YouTube have strict policies against artificially inflating stream counts to gain royalties and have implemented measures to curb such practices. Spotify, for example, recently adjusted its royalty policies to penalize labels and distributors if artificial streams are detected and increased the minimum requirements for stream counts and track lengths for royalty eligibility.
Wider Concerns
The rise of AI generated music and the widespread availability of free tools to create tracks have intensified concerns among artists and record labels about fair compensation for their work. AI systems, trained on vast datasets including copyrighted content, have sparked controversy within the creative industries. Artists argue that their work is being used to generate new material without proper recognition or compensation.
The music industry has already seen instances where AI generated tracks using the likenesses of popular artists like Drake and The Weeknd were removed from streaming platforms after going viral. Earlier this year, prominent artists including Billie Eilish, Chappell Roan, Elvis Costello, and Aerosmith signed an open letter urging an end to what they described as the "predatory" use of AI in the music industry.
