A singer-songwriter has pleaded guilty to defrauding music streaming platforms out of millions in royalties after flooding the services with thousands of AI-generated songs and automated bots.
As part of a deal with federal prosecutors in New York’s southern district, North Carolina man Michael Smith pleaded guilty on Friday (March 20) to conspiracy to commit wire fraud.
Smith had used AI to make both his music and its audience, creating hundreds of thousands of songs to be streamed by automated bots, which meant his songs were listened to billions of times without any actual human interaction.
The case against him marks one of the first successful prosecutions of AI-related fraud in the music industry, which has become a contentious topic amid the rise of AI-generated artists appearing in the charts.
“Michael Smith generated thousands of fake songs using artificial intelligence and then streamed those fake songs billions of times,” US attorney Jay Clayton said in a statement, per the Guardian.
“Although the songs and listeners were fake, the millions of dollars Smith stole were 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 first criminal case of streaming fraud where a North Carolina musician who used AI to make songs, then streamed them billions of times himself making $8 million pic.twitter.com/1ZhoZPDrkW
— FearBuck (@FearedBuck) March 20, 2026
Smith was charged in September 2024 with fraudulently obtaining more than $10m (£7,496,814) in royalty payments by accruing over 650,000 streams daily from 2017 to 2024, yielding annual royalties of in excess of $1,000,000 (£749,681).
U.S. Attorney Damian Williams said the defendant had stolen “millions in royalties that should have been paid to musicians, songwriters, and other rights holders whose songs were legitimately streamed” and pointedly said it was “time for Smith to face the music”.
Under the terms of his plea agreement, Smith now faces up to five years in prison and the forfeiture of $8,091,843.64 when he is sentenced later this summer.
The case against Smith highlights a growing problem for the music industry, which Lisa Nandy addressed while speaking to NME at the end of last year, when the Secretary of State for Culture, Media and Sport told us that a “one size fits all” approach would not work when it comes to AI laws across the arts.
“The challenges that are facing the music industry are not the same as the challenges facing the publishing industry,” she said. “We’re seeing a number of central deals being struck around music which are helping, but don’t undermine the case around collective licensing.
“There are smaller musicians and smaller companies that aren’t covered by those. We do still understand the need for legislation, particularly around transparency. Any new system needs to have a legislative underpinning.
Last year also saw the likes of Damon Albarn, Kate Bush, and Annie Lennox join over 1,000 artists in releasing the silent album ‘Is This What We Want?’ to draw attention to the potential impact that artificial intelligence could have on the music industry. “In the music of the future, will our voices go unheard?” asked Bush.
A recent survey found that 97 per cent of people “can’t tell the difference” between real and AI music, while most fans have said they want more restrictions on what AI can do.
Apple Music have now introduced a feature that will let you know if you’re listening to music made with AI, while Deezer revealed that 28 per cent of music uploaded to their platform is fully AI-generated.
The AI-generated artist Xania Monet also made headlines last year after signing a multimillion-dollar record deal and becoming the first AI artist to chart on the US Billboard rankings. The poet and designer behind the project said she saw Monet as “a real person” who is “challenging the norm”.
More recently, figures across the UK music industry responded to new government action on AI and copyright earlier this week, and said far more needs to be done.
On Wednesday (March 18), the government announced it will ditch “deeply damaging” plans to allow AI firms to use copyrighted works without permission. The likes of Paul McCartney, Kate Bush, Dua Lipa and Elton John have led a campaign urging the government to protect artists’ work from being ripped off, after the government previously put forward controversial plans to change copyright rules to let AI firms “steal” copyrighted works without paying or seeking consent from music creators, writers and artists.
The new reversal in policy came as Technology Secretary Liz Kendall confirmed that the plan is no longer the government’s preferred option and that they’ve ditched the proposed Text and Data Mining Exception.
