In short
- A North Carolina man has pleaded guilty to a conspiracy linked to an AI-powered music streaming app.
- Critics say the fake accounts generated billions in fake hits on the music industry.
- The case involves more than $8 million in royalties.
A North Carolina man pleaded guilty Thursday to a charge related to a scheme that used artificial intelligence and automated accounts to collect more than $8 million in music payments, according to the US Department of Justice.
Michael Smith pleaded guilty to conspiracy to defraud the Southern District of New York following a years-long investigation. He agreed to forfeit the royalty and serve five years in prison.
“Michael Smith created thousands of fake songs using artificial intelligence, then distributed the fake songs billions of times,” US Attorney Jay Clayton said in a statement.
A verdict is expected on July 29.
The case comes as AI-generated music tools become more widely available, allowing users to create songs with lyrics, sounds, and instruments from simple steps. Platforms such as Suno, Udio, and Google Lyria they have improved production, making it possible to produce large catalogs of transport on a large scale. At the same time, technology has raised questions about copyingownership, and how exchange platforms work with AI.
In January, Rolling Stone report Smith spent years in the music business, including recording music and working with industry partners, before investigators tied him to a conspiracy to manipulate advertising services.
Streaming services, including Spotify, Apple Music, Amazon Music, and YouTube Music, distribute it kings payments based on the number of plays, creating an incentive to increase streams.
When he was the first was called in September 2024, prosecutors said Smith created thousands of accounts to play music he owned, using software to generate about 661,440 streams per day and about $1.2 million a year. He was released on a $500,000 bond the following month.
“To get the amount of music needed for his scheme to succeed, Smith turned to artificial intelligence, which he used to create hundreds of thousands of AI-generated songs that he could control in streams,” prosecutors said.
Instead of focusing on a few trends, Smith spread the streams to a larger list. Critics said the system was designed to avoid detection methods that show irregular activity. The property also included its own recordings and hundreds of thousands of AI-generated songs, which allowed the process to take place.
“Even though the music and audience were fake, the millions of dollars Smith stole were real,” Clayton said. “Millions of dollars in royalties Smith took away from real, deserving artists and copyright holders.” Smith’s defamation scheme is now over, as he has been charged with a misdemeanor for his AI-assisted fraud.”
Attorneys for Smith did not immediately respond to a request for comment Decrypt.
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