Man Sentenced to 18 Months for Using AI Songs and Bots to Collect $8 Million in Streaming Royalties

A North Carolina man who prosecutors say used artificial intelligence to generate hundreds of thousands of songs, then deployed an army of bots to stream them billions of times, was sentenced on Tuesday to 18 months in federal prison for a royalty fraud that ran for seven years.Michael Smith, 54, was sentenced in Federal District Court in Manhattan by Judge John G.

Koeltl after pleading guilty to one count of conspiracy to commit wire fraud.Smith was also sentenced to two years of supervised release and ordered to forfeit $8,091,843.64, according to a press release issued by the U.S.

Attorney’s Office for the Southern District of New York.The Justice Department called the case the first criminal prosecution of a music streaming fraud assisted by what it described as “super intelligence” technology, a term the department used throughout its announcement without specifying which tools Smith employed.

“Michael Smith exploited super intelligence technology to generate a fraud,” Jamie McDonald, the United States attorney for the Southern District of New York, said in a statement.“By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans.” An estimated $4.6 billion in annual artist revenue could be lost to AI-generated music by 2028, according to a recent economic study conducted by CISAC and PMP Strategy with participation from the French streaming service Deezer.

The case offers a glimpse of how songs made using generative AI can be turned against the economics of the modern music business, where payouts to songwriters and performers are drawn from a shared pool of money and divided in proportion to listening.That structure is the vulnerability that prosecutors said Smith exploited.

Each time a track is streamed on a service like Spotify or Apple Music, the songwriter, the performer and...