A 54-year-old musician from North Carolina has been sentenced to 18 months in federal prison after using AI-generated music and automated bots to fraudulently generate more than $10 million in streaming royalties from platforms including Spotify, Apple Music, Amazon Music, and YouTube Music.
Michael Smith pleaded guilty in March after being indicted in September 2024 over a scheme that artificially inflated the number of streams on his songs between 2017 and 2024. According to court documents, Smith worked with the CEO of an AI music company and an unnamed music promoter to upload hundreds of thousands of AI-generated songs and use automated bots to stream them billions of times.
Smith used VPNs to make the automated streams appear to come from different locations and avoid detection by streaming platforms’ anti-fraud systems. At the height of the operation, he was using more than 1,000 bot accounts.
In an email dated October 20, 2017, Smith outlined how the operation worked, saying he was running 52 cloud service accounts with 20 bot accounts connected to each one. He estimated that every bot could stream around 636 songs per day, producing approximately 661,440 streams daily.
Based on an average royalty rate of half a cent per stream, Smith calculated that the operation could generate about $3,307.20 per day, more than $99,000 per month, and over $1.2 million annually.
As streaming services strengthened their anti-fraud systems, Smith and his accomplices increased the amount of music being uploaded to make the activity harder to detect. In an October 2018 email, Smith said they needed a large amount of new content with relatively small numbers of streams so the activity would not attract attention.
The scale of the operation became particularly clear in 2023. The Department of Justice said that Taylor Swift’s entire catalog received 9.3 million streams on YouTube Music through family plans in April that year, while Smith’s bot accounts generated 80.9 million fraudulent streams of his AI-generated music using family plans during the same month.
Smith later claimed in a February 2024 email that the operation had generated more than 4 billion streams and $12 million in royalties since 2019.
U.S. Attorney Jamie McDonald said the scheme used automated bots instead of genuine listeners and fake songs instead of original creativity, diverting royalty payments away from legitimate artists and their audiences.
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Along with the 18-month prison sentence, Smith was ordered to forfeit $8,091,843.64 and serve two additional years of supervised release.
Musician Sentenced After AI Bots Generated $10 Million in Fake Streaming Royalties
