Man indicted after making $10M in royalties from AI-generated music on Spotify, Apple Music

[Enter Stage Rite]

 

In what’s shaping up to be a major legal first, federal prosecutors have charged Michael Smith, a musician from North Carolina, with masterminding a scheme that defrauded music streaming platforms out of more than $10 million in royalties.

 

Smith, 52, is accused of using artificial intelligence to create hundreds of thousands of songs and inflating streaming numbers through bot accounts on platforms like Spotify, Apple Music, and Amazon Music. This case marks the first criminal indictment for artificially boosting music streams.

 

Prosecutors allege that Smith’s operation involved the creation of numerous fake email accounts, which were used to generate bot accounts that streamed AI-produced songs around the clock. By doing so, Smith reportedly funneled millions in royalty payments that should have gone to legitimate artists.

 

The indictment further suggests that Smith didn’t act alone—he allegedly teamed up with the CEO of an unnamed AI music company and other co-conspirators to pull off the elaborate scam.

 

Stressing the severity of the situation, US Attorney Damian Williams, representing the Southern District of New York, described the scheme as “brazen” and noted that Smith’s actions robbed rightful royalties from musicians, songwriters, and rights holders whose works were truly streamed.

 

Smith now faces serious charges, including wire fraud and money laundering conspiracy, with a potential sentence of up to 60 years in prison if convicted.

 

While AI has opened up new creative possibilities, such as AI-generated music and voices (think Grimes and her AI-driven vocals), it has also created openings for exploitation. 

 

• https://hollywoodunlocked.com/music-producer-accused-of-10m-royalties-fraud-on-streaming-platforms/ 
• https://variety.com/2024/music/news/ai-songs-spotify-apple-michael-smith-fraud-charged-artificial-intelligence-1236130680/ 
• https://www.justice.gov/usao-sdny/pr/north-carolina-musician-charged-music-streaming-fraud-aided-artificial-intelligence 

 

 

Illustration: Natanael Alfredo Nemanita Ginting | Dreamstime.com