In a nutshell: A man charged with conning music services out of millions by uploading AI-generated music tracks and using an army of over 1,000 bots to repeatedly stream them has pleaded guilty to one count of conspiracy to commit wire fraud. He now faces up to five years in jail and has agreed to pay $8 million in forfeiture.
From 2017 to 2024, 52-year-old Michael Smith, from Cornelius, North Carolina, and his co-conspirators ran a large-scale fraud scheme that artificially boosted the stream counts of AI-generated songs across Spotify, Amazon Music, Apple Music, and YouTube, according to court documents.
Instead of sending millions of plays to a small group of tracks and risking detection, Smith used a subtler tactic: acquiring hundreds of thousands of AI-made songs from a co-conspirator and spreading the streams across them in smaller amounts.
The tracks were uploaded under fake AI-generated artist names, including Calm Baseball, Calm Connected, Calm Knuckles, Calliope Bloom, Calliope Erratum, Callous, and Callous Humane.
At its height, the operation allegedly relied on 52 cloud service accounts, each running 20 bot accounts, for a total of 1,040 bots. Smith estimated that every account could stream about 636 songs per day while using VPNs to access the platforms, adding up to 661,440 daily streams.
Based on a royalty rate of half a cent per stream, he calculated that the setup could generate $3,307 per day, $99,216 per month, and more than $1.2 million per year.
In a February 2024 email, Smith claimed his songs had racked up more than 4 billion streams and earned more than $12 million in royalties since 2019 – a DOJ statement says he obtained more than $8 million in royalties.
Now, the US Attorney's Office has announced that Smith has pleaded guilty to one count of conspiracy to commit wire fraud.
Smith is set to be sentenced on July 29, where he faces a maximum sentence of five years in prison. He has also agreed to forfeit $8,091,843.64.
"Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," said US Attorney Jay Clayton. "Although the songs and listeners were fake, the millions of dollars Smith stole was real. 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."
The Guardian notes that the case has put the spotlight on AI-music-generating service Suno, which has 2 million subscribers. According to the US trade publication Billboard, Suno generates 7 million songs a day, which equates to a streamer's entire catalog of music every two weeks.