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The $8 million AI music scam | The Vergecast

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Hello and welcome to the Vergecast, the flagship podcast of Bot Farms. I'm your friend David Pierce, and today on the show, we're going to talk about one man's scheme to AI his way into millions of dollars of music royalty. The guy's name is Mike Smith, and he became one of the most important and frankly first cases to figure out what is streaming fraud, can you use AI to make and listen to music, and what does it all mean? Kate Nibs from Wired has been covering this story for years now and is going to come on the show and tell us all about it. But first, here's everything else happening on The Verge today. This is 90 seconds on the Verge for Wednesday, October 14th, 2026. Everybody is still getting used to the idea of the Apple Home View. Apple's $299 smart display is up for pre-order now, and it's designed to be kind of your family's central control system. It's for your smart home, communications, everything. I will say I've been pretty surprised at how much of the reaction to this has been from people who watched that 3inut video about family chaos and the home view and decided they just simply do not want another screen, another device, another thing to manage and worry about and have listening all the time. At this point, it's been a long time since I've been this curious how a new Apple product will go down when it goes on sale. Meanwhile, here's some rapidfire good news about video games. Fortnite is coming to Linux eventually now that Epic has said it's reworking its antiche software to work on the platform. Next, according to a big Bloomberg report out today, Rockstar is confident that whatever comes after GTA 6 won't take another 13 years to come out because building GTA 6 also meant building a ton of tools and tech that'll make the next games much easier. And The Legend of Zelda Ocarina of Time remake, which is out in a couple of weeks, appears by all accounts to be beautiful to look at and delightful to play. Thank goodness. And finally, there's a war brewing between the AI agents that want access to all of your data and every website and app on the planet and those websites and apps that are simply not interested in that trade. The latest example, JP Morgan Chase CEO Jamie Diamond, just said that the company is blocking agents from doing banking things on customers behalf. This fight is coming for every single surface of the internet. Get ready. You can read more about all this at the verge.com. That is 90 seconds on the verge for Wednesday, October 14th. All right, let's talk streaming. Kate Nibs, welcome to the Vergecast. >> Thanks for having me. >> I am very, very excited that you're here and I'm very excited to talk about this particular case which I have been fascinated by for years and kind of thought I would never have a chance to talk about on this show and then we got we got the ending of it and so now we get to talk about it. But you have covered this in in much greater detail than I have over the last couple of years. And so I want to I want to kind of rewind to the beginning for people who don't know what's going on. They don't know who Mike Smith is. They don't know how all this happens. I just want to dig into how all of this happened and what it means about the world we live in now. So, let's start at the very beginning. Tell me a little bit about Mike Smith, the person at the center of this case. >> Absolutely. Okay. So, I found out about Mike Smith because I was sort of on this role of covering different crimes involving AI slop. um and he was arrested and there were some news articles that you know basically just said this man named Mike Smith was arrested. It's the first criminal charges brought against someone for AI streaming fraud. And it made it sound like he was just some random man. And I went and ended up talking to people in his circles and like trying to understand who he was and how he ended up doing this novel kind of crime and found out that he had actually been in the music industry for many years and and had been actively trying to make it. And there was like an interesting buildup to this crime that I think is really important to know about to like put it in its proper context. So >> yeah, walk me through it a bit. >> Yeah, he didn't just go from like law-abiding citizen to super AI scammer. There there were steps along the way like he was uh running a series of urgent care clinics in North Carolina. Like he wasn't in the music industry at all. Um but he wanted to be a musician. And so he would sort of use his profits from the healthcare industry to try to make it in the music industry. You know, he would self-produce all of these music videos that are a lot of them are still on YouTube and they're incredible um artifacts. And then he would basically sort of pay artists to produce their songs. Um he was sort of part of this weird pocket of the music industry that I didn't realize existed but is actually pretty common place where um fairly well-established artists will take money from people who want to get a foothold in the music industry and the the someone will like produce a remix of their song and really they'll just sort of pay them to use their their music. Um, so he was trying to make a name for himself as an artist and producer. >> Was he a good musician? Like I'm sure you've listened to some of his stuff. Was he any good? >> Yeah. >> Um, not I I mean I wouldn't run out and like buy the vinyl. I probably wouldn't get up and turn it off. >> Sure. >> So he's just like he's a guy. He's just like a guy who knows how to play the guitar. Okay. >> Yeah. And I mean some people I he knows how to play the guitar better than many. Better than many. um he met this man named Jonathan Haye. They started a record label. They started um like signing artists and then still sort of doing this pay-to-play situation where they he he ended up financing a reality show um about who the next great rapper would be that actually aired on BET and Mike Smith was was a judge of like who the next great hip-hop artist will be. Um and it was because he yeah he like entirely financed it. But so he he sort of created this scaffolding of a career for himself um without ever actually releasing music that anybody listened to or liked which was impressive. >> So he's buying himself sort of the like credibility of someone who is in the music business without actually doing the music part of it. >> He was doing the music part of it. I think that's important in his defense. He was making the music. It's just no one was listening to it. He wasn't gaining a fan base. >> And he was doing all sorts of projects. Like at one point he was part of a large like 9 to 11 people musical group with Johnny Depp's nephew. Um >> Sure. You know, like you do. >> Yeah. And so he was just he was basically like flinging everything all the spaghetti to the wall to see what would stick and nothing was really sticking. Um, and I ended up when I was researching this case connecting with Jonathan Haye, his old like business partner, uh, creative partner, and he was like really willing to talk about what had gone down between them. And he was eager to tell me that Mike had been experimenting with artificial streaming for years prior to the AI stuff, and they had had this whole falling out over it. Um, and the AI stuff was sort of just taking it all to the next level. Like he tried so many years to be a musical artist, tried every shortcut there was to try to make a name for himself. And then once this new technology came around, didn't actually abandon the idea of making it as an artist himself cuz he was still trying to do that. He had this like cartoon with Snoop Dogg and like his his his fake career was actually going better than ever while he was doing the AI gambit. >> But he realized that he could profit a lot if he just like applied what he had learned trying to make his music go viral with AI songs. >> Wait, so this is a really interesting connection though because it does seem like there's one way to look at this case that is very straightforward sort of AI slop arbitrage, right? I found a way to make a bunch of money by making a bunch of AI content and that is absolutely everywhere on the internet right now. And I I want to talk about some of that too because I think this case is the beginning of many many things like it to come. >> Yes. But also there there is some I don't know like I hesitate to say Elizabeth Holmes but there is some kind of like fake it till you make it thing going on here that he's just like you can sort of see this guy who believes he is one turn one break one moment away like if only I could just get this one other thing going and you he almost sort of slippery slopes his way into this giant AI scheme. I don't know. Am I giving this man too much credit at this point? >> No. Oh, I think you're totally spot on. And I went into reporting the story assuming it was just going to be the sort of AI slop hustler entrepreneur arbitrage that I had been seeing in other parts of like the internet and media and then finding out that actually it was a slightly more complicated story. And I I suspect I have not interviewed him cuz he was basically awaiting trial while I was reporting the story and then ended up pleading not guilty. But um my hypothesis is that had he succeeded, he would have like redirected the money that he got from his AI slop back into his career. Like he wouldn't have given up. >> Um it's it's really wild. So yeah, so he ended up pulling like really succeeding in this novel art form of AI slot fraud and he >> um you know according to the US government and now he's plead guilty and you know is facing the crime managed to make millions and millions of dollars from a bunch of different streaming services creating hundreds of thousands of AI songs and then getting untold numbers of bots to just loop them on repeat. >> Yeah. So yeah. So, walk me through this flywheel. He he creates this sort of fascinating closed AI all the way down system to to do it. I I wound up finding the number was $8,91,843.64 was what the government ordered him to repay. So, that's that's the amount of money at the end of this. >> Tell me about the system he built that pulled all of this money in his direction. >> So, we know that he used a few different AI tools, including this AI song generation service called Boommy. Um >> that was like the pre-suno, right? It was one of the first ones to be out there letting you generate music like this. Okay. >> Yes. And it's similar, you know, if if listeners are familiar with like Suno or Udo, same concept. You can just basically put in a few prompts and create songs very very quickly. And so >> he would create these songs and then he would create fictitious musical artists. And you know there's it's it's pretty easy to put music up on the major streamers right now. There's usually uh distribution services you can pay to to put music up. There's actually a really interesting ongoing lawsuit between Universal Music Group and one of these distribution companies called Drokid >> and UMG is arguing that Drokid is is like a slot purveyor. So it's like the next thing next thing that I got to write about. Um but yeah, so he would quickly generate these songs, churn up some musical artists, spray them onto the platforms, and then he would uh basically create networks of bots to stream all of the songs on loops, and then he would I don't know exactly how he got the money, like whether there were intermediaries to make it more less obvious or what happened, but then he ended up, you know, funneling the money back to himself. Um, and I want to point out, so $8 million in the era of bajillion dollar valuations for AI companies might not sound like that much money, but music streaming pays nothing. So, it's actually an insane amount of money to make off of streaming. Like, >> that's true. >> It's it's superstar. Like, maybe not superstar, but it's it's you are a very successful musician if you are making that kind of dough off of the streaming services. So even though it's not money that uh Daario or Elon would would care about, this is like huge money in the music biz. So >> he um and he did it for a while and then there's a few different um sort of bodies that uh they don't regulate the music industry, but they're sort of >> keeping it in check like the RAIA. And at one point he kept getting flagged by like the distribution companies and >> the stream some streamers didn't catch him for a while. Some caught them him pretty quickly. Like when I talked to Spotify they were they were like we caught him right away. He did not steal millions of dollars from us. He got like tens of thousands from them and then they caught him. Um, but the like all of the various players did catch on that something funky was going on and he he put up a fight at first. The criminal complaint has a lot of interesting snippets from like his conversations of him saying, "No, I did like what are you talking about? This is all legit." Um, he he definitely tried to play it off. Um but eventually, you know, the government amassed enough evidence that they thought that they had a strong case against him. >> Support for the show comes from Outshift, Cisco's incubation engine for Frontier Technology. You can find multi-agent AI in every enterprise roadmap right now. But here's the problem everyone's facing. Agents can pass messages but can't think together. These systems silently underperform through cognitive failures, misreadings, unverified claims, false consensus, and conventional monitoring can't detect them. Outshift by Cisco is building the fix with their new comprehensive resource, the internet of cognition. It's an open-source guide that's a foundation for building multi- aent systems from design to production. 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Um, and cuz especially I think against platform rules is kind of where I want to start because if if you rewind what five or six years ago when he's at the kind of the heyday of this, nobody's talking about AI music, the the the like slapification of all these streaming services is is, as far as I can tell, neither against the terms of service nor a real problem for these companies yet. Um, and also if it's illegal to put AI music on a streaming service, there are an awful lot of people who should be in jail. So, so like if if you go back to when he's doing this, what was he doing that he wasn't allowed to do? >> No, I think you're making a a great point and a point that he he brought up a lot as he was keep defending this guy. Okay. I don't know how he >> No, because I was not sure how this case was going to play out after talking to like music industry legal experts because it it wasn't so clearcut. you know, it's fully permitted to put AI music on these platforms. Like they they don't have rules against that. Now, recently they've sort of started tightening up a bit like Spotify just removed 75 million AI generated songs, but there's nothing disallowing AI like broadly speaking at all and there never has been. I honestly think it'd be a pretty smart business idea to come up up with some sort of like anti- AI human artists only streaming network, but I also think that would be like impossible to monitor. Um, so yeah, the the thing that he did that was a crime wasn't putting all the AI songs on these platforms. It was maybe a crime against taste, but not a crime against the law. >> It definitely was that. Yeah. the thing that they got him for like the the streamers do prohibit artificial stream like stream inflation. >> Um that doesn't mean it it still happens all the time and there have been a lot of different like very legit human musical artists who have been accused of like botting their streams and artificially inflating them. I mean, this has been true since like time immemorial on the internet, right? Like, as long as I have been covering this space, it has just been common knowledge that if you have $10 and 10 minutes, you can go buy yourself a million Instagram followers or as many views on YouTube as you want. Like, this is such a known quantity of the internet that it's fascinating to me that that somebody got caught for it. >> It's it's it really is. And yes, so that was technically against the terms of service, but whether it was criminal or not, I thought was >> very debatable. Like >> they ended up charging him with fraud. It was it was not one individual thing that he did and it it was sort of all of it together amounted to this duplicitous action that >> counted in their eyes as as fraud. >> And I guess to some extent it's probably the lying, right? cuz you were saying when they were reaching out to him being like, "Are you using fake accounts to stream your music?" He was like, "No, no, no, no, no. Keep paying me my money." And I guess that that at some point becomes a crime. >> Yeah. And I I wanted this to go to trial just as a reporter cuz it was going to be juicy. He hired Diddy's lawy legal team, so I really thought he was going to go to trial. Um, and I honestly thought that he had a decent chance of winning because there had just never been a case mounted exactly like this before and it was unclear that any one of the concrete steps that he took was criminal. Um, however, he plead guilty and >> the sentencing, I mean, he's going to prison. Yeah. >> For this, >> which is is pretty wild to me, I gotta say. Like I do not condone streaming fraud at all. Um should someone actually have to be behind bars? Is that a good use of like state money? I would I don't think so. Um but that's that's what's happening. He's going away for 18 months. And the prosecution really pushed this idea that it would be a deterrent to others and that, you know, he was to be made an example of and this is something that's like rocking the music industry. But he it is kind of like yeah I'm sure and you know this is just me speculating. I'm not naming any names. Don't sue me. But like I'm sure that there are players in the music industry who are acting on behalf of real artists who have certainly thought about, you know, all of this artificial inflation. And um yeah, it just seems kind of anticlimactic for this one random guy to be the sole like dude who was going away or facing any sort of consequences. >> I mean, this is the same music business that tried to like punish college kids into oblivion for pirating music. So, I can't say I'm completely shocked. It's g it's giving Napster >> era like we're getting a little uh >> you know we're losing some perspective here in in my opinion. I would like them to go to go against up against more uh powerful players personally. >> So to that end actually one of the things I found myself wondering in researching this case is if he had just played it a little smaller if he might have gotten away with it. Because I think the the thing that you see now and the thing that there's been a lot of reaction to even after the sentencing of this case is that everybody is just like this is rampant in the music industry. Uh the streaming services themselves are using AI generated music to take royalties that would otherwise be given to artists by putting those songs on the playlist. people are juicing their own streams every like there was a whole kurfuffle over Drake and Kendrick Lamar and who was buying streams for what and like there there is like you said a sense that this is just pervasive and part of me wonders if if Mike Smith had just been cool with like $2 million if he would have just gotten away with it because this this thing is so complicated to find on all sides, right? It is very hard to police what's AI. Uh back then the idea of AI artists was new enough to be not really regulated in any meaningful way and this world of music royalties is so diffuse and diverse and complicated that it actually seems like if you want to get away with a scheme this is a pretty good one he might have just gotten like a little bit too big for his britches. >> I totally agree. Um, if I'm sure that there are like dozens and dozens of just like many Mike Smiths still operating that are just a little savvier. One thing I thought was interesting, I talked to some people who work for like anti- fraud companies that specialize in detecting AI music and fraudulent streams. Um, Morgan had um one of the executives at um one of these companies. He was telling me that a obvious mistake that Smith made was he was in the United States the whole time. And a lot of the people who are more of your straightforward like AI slop entrepreneur grifters, they're doing it from, you know, a beach in Cambodia. Um, and so he made himself a little too easy to find. Basically should have gone abroad. >> Yeah, that makes total sense. What do you think he was trying to do by doing it so broadly? Like like you said, he made his own music. The simple thing to do would be to use your army of bots to go juice your own streams and make yourself a very popular artist. He did that a little bit, >> but he also created that like the the case for him just being a scammer is that he had lots of artists he didn't care about, making lots of songs he didn't care about, paying him lots of money that he did care about. >> Like it would it would be somehow more endearing if he was trying to do this to once again buy his way into music fame and fortune. Why don't why do you think he didn't just do that? I think he it was almost too lowhanging of fruit like it was so easy and >> you know he and Jonathan when they were creating all this music and then he was going out and juicing the streams they worked really hard um but you you know two humans it takes it still takes a while to make up songs and and get in a studio and it's so much quicker to just push a button. I I think it was likely that he thought it was less risky to sort of diffuse the amount of botted streams amongst like hundreds of thousands of AI songs. >> Yeah. This one artist nobody's ever heard of got a billion streams today is like that's you're going to flag the systems a lot more easily, I guess. Okay. We called the the piece that I wrote about this a billion streams and no fans because that was like even when they were still in the phase of Mike botting their songs, Jonathan thought it was really weird that they were getting on the Billboard charts and like no one knew who they were. So I do think yeah, he probably realized that there was like a ceiling to how much he could juice his own career without people noticing. Um, and and at the I mean at the time that he was pulling this off, it just probably seemed like something that could still slip under the radar um with the streamers. Um, clearly that did not work out. But yeah. >> Yeah, I think that makes sense. I guess if he was It's certainly a lot easier to hide in vast quantities than to, you know, actually just try and juice your own streams to the moon. Um, and this actually seems like the playbook that is being used all over the place with with AI slap. You you know, you you've covered a lot of these things from the people who are making AI versions of every successful book on Amazon, hoping some people will accidentally click on it and buy it. They make a little bit of money and some of them get removed, but you do it. I remember a couple of years ago covering this podcast company that was like, "We're going to make a billion podcasts and if we only get 15 listeners to each one, we'll still make a ton of money because they're AI and and it doesn't matter. That doesn't the marginal cost of making them is nothing." The the I think you also covered a lot of the like websites that are being bought and turned into these slap farms because they have some SEO juice in Google. Like this just is the playbook now. And it makes me wonder if like to some extent Mike Smith like kudos for being ahead of your time. He started doing this way before anybody else is talking about this. But also, he is in a certain way, it seems like even the prosecution has admitted that they are they're trying to make an example out of him that like they understand this is a game being played on the internet at massive scale to sort of unknowably large amounts of money and they have to put the fear of God into everyone doing it by kind of punishing this man. >> Yeah. I mean, it is something that is so overwhelming. I I get the I get the impulse to want to at least have one example to be made because anyone spending any time on the internet right now knows how how flooded it is. Like you go to buy a book on Amazon and you have to click through like pages of versions of the book where there's one letter different and it's just >> Oh yeah, it's awful. Since I first started covering this in like 2023, there have been major moves from the platforms. Like when I first wrote about AI generated books on Amazon and talked to Amazon, they did not seem to realize the scale of the problem at all. And when I like brought up, oh, are you going to come up with ways to flag AI contact like it didn't seem to be something that they had considered? And now they are they have been like incrementally taking steps to try to limit the amount of books that people can self-publish. For instance, Spotify, as I was mentioning, like just removed 75 million songs last year. They like the the music streamers really are realizing that this is an issue. the the labels are realizing this is an issue. Um like even LinkedIn which there was a moment when LinkedIn was like pushing people to use AI to make posts and now they came out with their >> the button that you can smash if you see AI slop on on the um on the scroll. So like there is this movement I think there is this recognition increasingly that this is a problem. this is distorting and diminishing the internet for people. Um, and there are efforts to try to combat the delusion of slop. I I don't know if like this this one guy going to jail is is really going to do that much because I think that any wannabe AI slop grifter could look at this case and just be like, "Oh, I'll just, you know, again, do it from Thailand, do it from Mexico City." um take a few steps to obscure my identity, slap some crypto in there somehow. >> Support for the show comes from AWS AI. AWS AI is powering transformation across the world's leading organizations, moving AI from possibility to production at scale. Like how AWS AI helps Formula 1 turn race day data into realtime insights that bring fans closer to the action. or how it helps Booking.com personalize every trip for travelers around the world. 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Poor Mike. he missed his chance to make even more money because yeah, there was this whole thing where Spotify like people were clearly artificially botting songs on Spotify so that they could make winning trades on prediction markets. like there there this whole new incentive to to bot has has um cropped up and I >> I don't I I really every day I wake up and I'm so grateful that I'm not in charge of like platform integrity for a social network. It's like >> a nightmare um to try to keep all of this at bay. Um like it really does. Do you have a sense of whether these companies feel like they can get their arms around these problems or are we just spiraling into total nihilism about all of it? I mean even the prediction markets would say they are taking efforts to make sure that these things are are legitimate and that there's integrity in the process and if you are going to lose your bet because somebody else juiced the Spotify streams, people are going to stop using prediction markets. So there's there's incentive for all of these companies at every level to solve this problem, but it feels like in so many ways the problem is just running so much faster. >> Like are the are the folks you talk to who are trying to solve this problem actually optimistic that they can? >> Short of like throwing people into prison performatively to scare everybody else. >> I wouldn't say I'm I'm hearing an overwhelming optimism. I think most people working for the companies would say to your face like, "Yeah, we're fighting." And and I do think that there have been positive steps towards like coming up with better spam filters to get rid of just straight AI generated slop on a lot of these platforms. But like we're running into a moment where it's not just the purely fully AI generated like shrimp Jesus Mike Smith songs like that bucket of content that's changing our experience of the internet. There's also just, you know, we are moving towards a world in which most things that we see online are at least AI assisted and it's like how do we move forward in in that world and and assess quality. Um, since I've been reporting on how like AI is changing the media, I've been slowly coming to terms with the fact that even though my sort of natural um response to like using AI to to write a news article is kind of revulsion still. I I don't think that that's going to be the case for the general public in even a few years. like I don't think most people care if if the content that they're consuming is partly AI generated or AI assisted. Um and so I'm still trying to figure out what that means. >> Yeah, I I found myself wondering again in the case of Mike Smith if if he had gone on a platform where there was sort of a less direct money system and again if he's just in it to to juice views and appear to be famous and successful. if he'd gone on TikTok, right, and and bought himself the same amount of views and the same amount of streams and the and then used that to go in some less direct way make money. >> Mhm. >> It doesn't seem to me like Tik Tok or anybody else has tools or even incentive to go solve that problem, right? Like nobody if if I went and bought myself a million views on Tik Tok this afternoon, nothing would happen. Like this Tik Tok has no incentive to do anything about it. It's a it's too big a problem. they don't care. It doesn't cost them any money anyway. Whatever. Um it feels to me like the only problem here is that he made a lot of money. And and so again, and like it makes sense, right? So these companies are going to chase after it where it really eats into their business. But then I think about Spotify as a good example. Does Spotify have any incentive to try and figure out what is and is not AI on its platform when it doesn't cost it any money? The answer seems like no. And so maybe everybody but Mike Smith will just get away with this. >> I'm surprised they've done as much as of as they've done at this point because it seemed to me like I I guess it's just reputational like they don't want to have a reputation as being a slot purveyor. Um like the the business mechanics I don't think that there's like a huge profit like direct profit incentive to remove slop. And again, like as we're moving towards a a time when most songs will have be touched by AI in some way, not that they'll be wholly AI generated, but AI will be used in the production process. I I don't think it's feasible to come up with a like this is AI, this is not AI, like two categories. It's just going to get too tough. And I think that they will come up with ways and they already kind of have come up with ways to filter out the songs that truly are just like Sunseo audio uh you know crumbs, but anything beyond that seems like a huge headache. >> Yeah, agreed. And it and it's only going to get more so as these companies try to figure all of this out. All right. Well, Kate, I'm glad we got to do this. Thank you for coming on. This is this is really fascinating. I'm going to go listen to a bunch of Mike Smith music. Um, if it turns out it's great, I will report back and we will talk about this again. But thank you for being here. >> Thanks for having me. >> All right, that's it for the show. Thank you to Kate for being here and thank you as always for watching and listening. If you have thoughts, questions, feelings, if you have a favorite Mike Smith song you want to tell me about, I would absolutely love to hear it. Email us vergecasterge.com. Call us 866 Verge11. Ask us all of your questions. We're going to get back in the cadence of doing a regular hotline episode every week. So send them all. I want to hear them all. We will do our best to answer as many as we can. Also, the best thing you can do to support all of this, everything we're up to here at The Verge, is to subscribe to The Verge. The verge.com/subscribe. It gets you all of our podcasts with no ads, including this one. It gets you all of our newsletters, all of our coverage of everything. There's a lot of gadgety stuff still to come this fall. You're going to want to be in on all of it. Verge.com/subscribe. Thank you in advance. The Vergecast is a Verge production and part of the Vox Media Podcast Network. This episode is produced by Josh Kahas, Kabir Chopra, Brandon Kefir, and Travis Laruk. See you tomorrow. Rock and roll.

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