Michael Smith’s AI Music Fraud: Key Lessons for Ethical AI Creators

Michael Smith and AI Music Fraud: A Warning and Reflection for AI Music Creators

Michael Smith’s AI music fraud shocked the industry, but what does it mean for legitimate AI creators like you? Learn how to protect your work and avoid legal risks in the evolving world of AI-generated music.

The recent case of Michael Smith, a North Carolina musician who orchestrated a multi-million-dollar fraudulent streaming scheme using AI-generated music, has sent shockwaves through the music industry. Smith was charged with defrauding music streaming platforms like Spotify, Apple Music, and YouTube by using bots to artificially inflate streams of his AI-created songs, resulting in illicit royalties amounting to over $10 million​ (Shore News Network)​(BleepingComputer).

 While the case presents a clear instance of deliberate fraud, it also sparks important discussions for AI music creators who are operating legitimately. This article delves into the details of Smith’s scheme, its implications for AI-generated music, and why it’s essential to remain transparent and law-abiding when working with AI platforms like Suno AI.

What Michael Smith Did Wrong

Michael Smith’s scheme revolved around three key elements:

  1. Bot-Driven Streaming: Smith employed automated bots to continuously stream his AI-generated tracks, racking up millions of fake streams to earn royalty payments. He used VPNs and fake accounts to avoid detection, spreading the streams across thousands of tracks to keep the fraud under the radar​ (BleepingComputer).

  2. Fake Artist Names: Smith disguised the AI-generated songs under thousands of fabricated artist and track names to make them seem like legitimate human-created works​ (Shore News Network). He intentionally misled both listeners and the platforms into believing these songs were part of the broader music ecosystem.

  3. Lack of Transparency: At no point did Smith disclose that his music was AI-generated, nor did he admit to using bots for fraudulent purposes. This lack of transparency was central to his scheme’s success—and ultimate downfall.

Smith’s fraudulent activities were clearly illegal, and they violated the terms and conditions of the streaming platforms. The indictment against him demonstrates that the music industry is actively working to protect the integrity of legitimate artists and prevent the exploitation of automated tools​ (Justice).

The Key Differences for Legitimate AI Music Creators

For AI music creators like myself and many others in the growing AI music space, it’s essential to distinguish our practices from Smith’s fraudulent behavior. Here’s how creators like myself approach AI music in a completely legal and ethical manner:

  1. No Bot Manipulation: Legitimate AI music creators do not use bots to artificially inflate their streams. Platforms like Spotify have stringent anti-fraud measures in place to detect and prevent bot activity, and creators who work within the rules do not need to worry about artificially inflating their streams.

  2. Transparent AI Labeling: Transparency is a fundamental difference. As an AI music creator using platforms like Suno AI, I make it clear that my music is AI-generated, either through direct labeling or through branding as an AI artist. This approach builds trust with listeners and platforms alike, ensuring that no misrepresentation takes place.

  3. Ethical Ownership: Platforms like Suno AI allow creators to own the AI-generated content they produce, provided they use a paid plan. However, ownership doesn’t mean automatic copyright protection. Many AI creators are unaware of the complexities around intellectual property, assuming that owning the AI music grants them full rights to it. As I’ve written extensively, AI-generated music is not automatically eligible for copyright protection unless a significant human element—such as modified vocals or instrumental tracks—is introduced ​(Justice).

The Legal Grey Area of AI Music

One of the biggest challenges for AI music creators is navigating the evolving legal landscape around intellectual property and royalties. While AI platforms like Suno grant ownership rights, full copyright protection often hinges on proving a human contribution to the creative process.

Smith’s case provides a stark reminder that fully automated AI compositions—without any human intervention—are unlikely to qualify for copyright protection. In fact, even if the lyrics are original and generated by the creator, AI platforms like Suno don’t guarantee that the music will pass the strict scrutiny required for copyright registration.

To increase the likelihood of receiving copyright protection:

  • Break your song down into stems (individual instrumental and vocal tracks) and replace or enhance parts with human-created elements.
  • Re-record AI-generated vocals with live vocals or significantly modify the existing ones to demonstrate human input.
  • Introduce human enhancements to AI-generated instruments by adding live performance elements or arranging new compositions that alter the AI base track.

These steps demonstrate that human creativity has contributed to the work, which is often necessary to receive full copyright protection in many jurisdictions​ (WHQR).

Misconceptions Among AI Music Creators

A common mistake among many AI music creators is stopping their research once they find confirmation for their biases. It’s important to dive deeper into the nuances and “grey areas” of AI music and copyright law. For example:

  • Ownership vs. Copyright: Just because you own an AI-generated track doesn’t mean you have full copyright protection.
  • The Human Element: As noted, copyright law still favors works that demonstrate human creativity. A purely AI-generated track may be owned by the creator, but it may not qualify for copyright without substantial human input.

The key lesson here is that AI music, while exciting and full of potential, must still conform to existing legal frameworks around copyright and royalties. Ignoring these nuances can expose creators to risks, especially as the law evolves to address AI-generated content​(BleepingComputer)​(Shore News Network).

Recommendations for AI Music Creators

As AI music becomes more integrated into the music industry, it’s crucial to learn from cases like Michael Smith’s and follow best practices. Here are ten recommendations for AI music creators who want to ensure they are on the right side of the law:

  1. Avoid bot manipulation: Never use bots or automation to boost streams artificially.
  2. Be transparent: Clearly label your music as AI-generated and be upfront with listeners.
  3. Understand ownership vs. copyright: Realize that owning an AI-generated track doesn’t automatically grant full copyright protection.
  4. Incorporate human elements: Add human creativity into your tracks by enhancing vocals or instruments.
  5. Break songs into stems: Use individual stems to isolate AI elements that need human input.
  6. Document your creative process: Keep detailed records of your human contributions to AI-generated tracks.
  7. Stay updated on copyright law: Laws surrounding AI music are evolving—stay informed to protect your work.
  8. Respect streaming platform guidelines: Follow the terms and conditions of streaming services to avoid suspicion or penalties.
  9. Consult legal experts: If in doubt, seek professional advice to navigate the legal aspects of AI music creation.
  10. Deep dive into research: Don’t settle for surface-level knowledge—ensure you fully understand the legal landscape.
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