US Man Pleads Guilty in $8 Million AI-Generated Music Conspiracy

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A North Carolina man has pleaded guilty to operating a multimillion-dollar conspiracy designed to defraud music-streaming platforms and musicians using AI-generated songs and bots.

According to the US Department of Justice, Michael Smith admitted to one count of conspiracy to commit wire fraud after using AI tools to generate hundreds of thousands of songs and using a network of automated bot accounts to stream them billions of times across major platforms.

The Department of Justice said:

Smith spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song, which would likely cause the Streaming Platforms to discover his scheme. To obtain the necessary number of songs for his scheme to succeed, Smith turned to artificial intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams.

At one point, his operation was capable of producing more than 600,000 streams per day, making him over $1 million a year.

US Attorney Jay 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. Smith’s brazen scheme is over, as he stands convicted of a federal crime for his AI-assisted fraud.

Smith has agreed to forfeit more than $8 million and faces up to five years in prison. Sentencing is expected on July 29, 2026.

The case demonstrates how AI has led to an unprecedented level of sophistication in fraud, with automated systems leading to exploitation on a great scale.