In Magic: The Gathering, you know it as the Channel/Fireball card combination. In 2000, an engineer named David Phillips accomplished something like it by buying $3,140 worth of pudding, and receiving $150,000 in frequent flyer miles. It’s that elusive, too-good-to-be-true arbitrage scheme that causes you to instantly win at life.
Unfortunately, it turns out the version where you make AI bots listen to AI songs and collect millions of dollars in streaming royalties can result in a year-and-a-half prison sentence. A guy named Michael Smith, who pleaded guilty to doing just that back in March, has just learned this the hard way.
U.S. Attorney Jamie McDonald describes Smith’s crime less appreciatively in a Justice Department press release about the sentencing, which uses the term “Super Intelligence,” as is required by a recent executive order from the President.
“Michael Smith exploited super intelligence technology to generate a fraud[…]. 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. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud.”
According to Billboard, Smith, a 54-year-old from North Carolina, started all the way back in 2017, automating thousands of accounts and making them endlessly stream his own songs, which were, at first, his actual creative output. But then he found it more lucrative to just upload mass quantities of AI-generated songs, and force his bots to play those—creating a beautiful ouroboros of robots listening to other robots.
But the Justice Department is correct that this type of scam, which may seem like it only harms the streaming services themselves, can take a toll on smaller artists because some of them rely on a zero-sum, competitive payment system. Spotify, for instance, has one huge pool of royalty funds, and distributes that proportionally to artists based on the number of listeners they received.
The Justice Department says Smith was also ordered to forfeit the $8,091,843.64 he was paid in royalties.
