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Man Pleads Guilty to Making $8 Million by Creating Music With AI and Using Bots to Drive Zillions of Fake Streams

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Why This Matters

This case underscores the growing risks of AI-driven fraud in the music industry, highlighting how malicious actors can exploit AI and automation to generate fake streams and steal royalties. It emphasizes the need for stronger detection and regulation to protect genuine artists and ensure fair compensation in the digital music ecosystem.

Key Takeaways

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For quite some time now, human musicians have watched in horror as AI-generated slop has started drowning out their work on streaming platforms.

Companies like Spotify have discovered entire networks of bots that were designed to fraudulently boost the listenership of AI-generated music, a bizarre scheme essentially involving bots listening to bot music to capture royalties that could’ve otherwise been paid out to real human artists.

The problem has been around for years — but prosecutors are finally catching onto the dubious scheme and putting those running the bot farms to justice.

In a Department of Justice press release, the Southern District of New York attorney Jay Clayton announced that North Carolina native Michael Smith had plead guilty for creating “hundreds of thousands of songs with AI” and using “automated programs called ‘bots’ to fraudulently stream his AI-generated songs billions of times.”

The goal was to “mimic the genuine streaming activity of real consumers,” ultimately allowing him to “fraudulently obtain more than $8 million in royalties” across music streaming platforms such as Amazon Music, Apple Music, Spotify, and YouTube Music.

Smith pled guilty to one count of conspiracy to commit wire fraud, and is facing a maximum of five years in prison. His sentencing has been scheduled for July 29. Smith has also agreed to forfeit over $8 million he made on the scheme.

“Although the songs and listeners were fake, the millions of dollars Smith stole was real,” said Clayton in a statement. “Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders.”

“Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud,” Clayton added.

The news highlights how AI tools aren’t just being used to impersonate artist; the tech is being used to generate phony listenership as well, through both armies of bots and unassuming listeners.

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