52-year-old Michael Smith has pleaded guilty to running a scam that netted him approximately $8 million. He reportedly used thousands of bots to consistently stream music from AI-generated artists across multiple platforms, racking up payouts in the process.
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Michael ran the scam for seven years.
"For seven years, Smith was found to have operated a scheme that funnelled streams to 'under-the-radar' artists," Dexerto reported. "These artists were AI-generated, and revenue from the streams found its way back to Smith."
Following his guilty plea, Michael could now face up to five years in jail.
Throughout the lifetime of his scam, Michael was boosting streams across Spotify, Apple Music, Amazon Music and even YouTube. He managed to stay under the radar by creating thousands of AI-generated songs, funneling views to each of them, to avoid inflating any single track's play time.
"Rather than focusing said boosts on a handful of songs, however, Smith reportedly worked with others to generate hundreds of thousands of songs using AI. They then boosted streams on these tracks, making it harder to detect the activity," Dexerto continued. "...As per his own math, working on a royalty rate of half a cent per stream, Smith could have generated up to $3,307 per day, or roughly $1.2M per year."
The U.S. Attorney Has Issued a Statement on Michael Smith's Scam
U.S. Attorney, Jay Clayton, has released a statement regarding Michael's successful ploy.
"Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times," Clayton said. "...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."
As AI continues to become more commonplace within everyday life, new and innovative scams such as this one will continue to arise. Michael took advantage of the easily available technology. He found a way to circumvent the system's monitoring tools and reaped the benefits for years on end.
Fortunately, he's now been caught and his scheme shut down. It will be interesting to see what failsafes the streaming giants implement moving forward. Still, as far as scams go, this one was certainly different.
