A North Carolina man has pleaded guilty to defrauding music streaming platforms and fellow musicians out of millions of dollars in royalties by flooding services with thousands of AI-generated songs and using automated bots to artificially boost listens into the billions.
Michael Smith, 52, of Cornelius, North Carolina, pleaded guilty on Friday to conspiracy to commit wire fraud as part of a deal with federal prosecutors in New York's southern district. The case is one of the first successful prosecutions of AI-related fraud in the music industry.
US attorney Jay Clayton said Smith generated thousands of fake songs using artificial intelligence and streamed them billions of times, stealing millions of dollars in royalties that should have gone to real artists and rights holders. Smith was charged in September 2024 with fraudulently obtaining over $10 million in royalty payments by amassing up to 661,440 streams daily between 2017 and 2024.
Under the plea agreement, Smith faces up to five years in prison and forfeiture of $8,091,843.64 when sentenced in July. The case highlights a growing problem for the music industry, which now faces an AI-based threat to revenue from streaming platforms such as Amazon Music, Apple Music, Spotify and YouTube Music.
AI-generated music and schemes to boost plays divert funds from musicians and songwriters whose songs were legitimately streamed by real consumers. The UK government recently abandoned plans to allow AI companies to use copyrighted works without permission, a proposal opposed by thousands of artists including Elton John, Dua Lipa and Paul McCartney.
