Month: September 2024

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On Wednesday, federal prosecutors charged a North Carolina musician with defrauding streaming services of $10 million through an elaborate scheme involving AI, as reported by The New York Times. Michael Smith, 52, allegedly used AI to create hundreds of thousands of fake songs by nonexistent bands, then streamed them using bots to collect royalties from platforms like Spotify, Apple Music, and Amazon Music.

While the AI-generated element of this story is novel, Smith allegedly broke the law by setting up an elaborate fake listener scheme. The US Attorney for the Southern District of New York, Damian Williams, announced the charges, which include wire fraud and money laundering conspiracy. If convicted, Smith could face up to 20 years in prison for each charge.

Smith's scheme, which prosecutors say ran for seven years, involved creating thousands of fake streaming accounts using purchased email addresses. He developed software to play his AI-generated music on repeat from various computers, mimicking individual listeners from different locations. In an industry where success is measured by digital listens, Smith's fabricated catalog reportedly managed to rack up billions of streams.

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The first wave of major generative AI tools largely were trained on “publicly available” data—basically, anything and everything that could be scraped from the Internet. Now, sources of training data are increasingly restricting access and pushing for licensing agreements. With the hunt for additional data sources intensifying, new licensing startups have emerged to keep the source material flowing.

The Dataset Providers Alliance, a trade group formed this summer, wants to make the AI industry more standardized and fair. To that end, it has just released a position paper outlining its stances on major AI-related issues. The alliance is made up of seven AI licensing companies, including music copyright-management firm Rightsify, Japanese stock-photo marketplace Pixta, and generative-AI copyright-licensing startup Calliope Networks. (At least five new members will be announced in the fall.)