Royalty fraud case highlights growing concerns over AI manipulation in streaming

A resident of North Carolina was convicted of using AI artists and listeners to steal more than $8 million in earnings from streaming services, as per MetalInjection. It was discovered that he had made thousands of bot accounts, which he then utilized to broadcast the music of the AI-generated artists for whom he had made fictitious streaming accounts.

… streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming.

In a news release, the U.S. Attorney’s Office in New York announced “the guilty plea today of Michael Smith for his role in a scheme to defraud music streaming platforms and musicians of royalties.“” The news release particularly included companies like Spotify, YouTube Music, Apple Music, and Amazon Music.

This person created “hundreds of thousands of songs with artificial intelligence and used automated programs called “bots” to fraudulently stream his AI-generated songs billions of times, in an effort to mimic the genuine streaming activity of real consumers. Smith pled guilty today to conspiracy to commit wire fraud before [a] U.S. District Judge.“

Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times. 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. – Jay Clayton, U.S. Attorney

Smith was forfeited $8,091,843.64 to the parties cheated as a result of the phony listener accounts streaming the phony artists billions of times. In the end, Smith entered a guilty plea to one charge of wire fraud conspiracy. He is scheduled to be sentenced on July 29th, but the maximum term for this conviction is five years in prison. It does pose a more significant concern about whether streaming services are prepared to implement safety measures to safeguard themselves as well as the artists and their customers.