AI Gone Rogue: Music Producer Faces $10M Streaming Scam Allegations

The music industry has been rocked by the news that a North Carolina-based producer has been arrested in connection with a multi-million-dollar fraud scheme involving AI-generated songs. Michael Smith, 52, of Cornelius, N.C., was taken into custody on Wednesday, facing multiple felony charges after allegedly swindling more than $10 million in royalties through a sophisticated streaming scam.

According to the indictment, Smith created hundreds of thousands of bot accounts on popular streaming platforms like Spotify, Amazon Music, and Apple Music. He allegedly used these accounts to continuously stream AI-generated music he had uploaded, racking up as many as 661,440 streams per day. This flood of artificial plays resulted in massive royalty payouts, all of which landed in Smith’s pocket.

The prosecutor’s office claims that Smith found a way to bypass fraud detection systems set up by the platforms. Initially, he allegedly used the technique on music that he owned. But streaming platforms have measures in place to flag suspicious activity when a song hits astronomical play counts, such as a billion streams. Smith is accused of using advanced AI to avoid these red flags and continue the scam unnoticed for a significant period of time.

The case highlights growing concerns about AI’s role in the music industry, especially as technology advances and becomes harder to distinguish from human creativity. This scandal serves as a wake-up call for streaming platforms, artists, and the industry as a whole, as it raises serious questions about the integrity of royalties and the potential for AI to exploit systems meant to reward genuine artistry.

Stay tuned for more updates as this case unfolds and the music industry responds to this alarming misuse of AI technology.