
Summary
Written by a model from the transcript; not yet reviewed.
This episode explores the novel criminal case against Mike Smith, who was sentenced to 18 months in prison for orchestrating an AI music streaming fraud scheme that generated nearly nine million dollars in royalties. The guest and host discuss how Smith leveraged early AI song generation tools like Boomi, distributed hundreds of thousands of tracks through fake artist personas, and used bot networks to artificially inflate stream counts. They examine the legal boundaries of streaming fraud, the challenges platforms face in policing AI-generated slop, and whether this high-profile conviction will serve as an effective deterrent or simply drive similar operations overseas.
- Artificial streaming fraud involves using automated bot networks to loop songs on repeat and artificially inflate royalty payouts. 13:22
- Mike Smith was ordered to repay $8,091,843.64 for his AI music streaming scheme. 11:59
- Streaming services prohibit artificial stream inflation even when putting AI-generated music on platforms is technically allowed. 20:37
- Platforms like Spotify have removed massive quantities of AI-generated tracks as the scale of slop has increased. 20:04
Chapters
- 0:00Podcast Intro and Sponsorships
Hosts introduce the episode and list the sponsors before launching into the main story.
- 2:08Introducing Mike Smith and the AI Music Scam
David Pearce sets the scene, naming Mike Smith and outlining the alleged AI streaming fraud.
- 4:55Background on Mike Smith’s Music Career
Kate Nibbs explains Smith’s early attempts to break into music and his use of pay‑to‑play models.
- 12:18The AI Song‑Generation System
Smith’s workflow using AI tools like Boomi, Suno, and distribution services to create and circulate fake artists and tracks.
- 20:27Broader Implications for AI and the Internet
The conversation turns to the wider problem of AI slop across media, prediction markets, and the challenges of policing it.
- 40:42Closing Thoughts and Listener Engagement
The show wraps up with thanks to Kate, a call for listener feedback, and final sponsor messages.
Highlights
- 4:01
AI Agents Blocked By Banksinsight
The host notes that JP Morgan Chase CEO Jamie Dimon announced the company is blocking AI agents from conducting banking transactions on behalf of customers.
- 5:18
First AI Streaming Fraud Casestory
The guest explains that Mike Smith's arrest marks the first criminal charges brought against someone for AI streaming fraud.
- 12:18
Early AI Song Generatorsinsight
The guest and host discuss Boomi as one of the earliest AI song generation services used before tools like Suno and Udeo became popular.
- 13:55
Millions in Streaming Royaltiesdata
The guest highlights that making millions of dollars from streaming services is an extraordinarily high amount given how little music streaming typically pays.
- 19:52
No Rules Against AI Musicdebate
The guest and host point out that streaming platforms do not have rules disallowing AI-generated music, making the fraud charge dependent on botting rather than AI usage.
- 25:45
Avoiding Detection Abroadstrategy
An anti-fraud executive noted that Smith made himself easy to find by staying in the US, whereas many grifters operate from beaches in places like Cambodia.
- 34:47
Prediction Markets and Streaminginsight
The host and guest discuss how prediction markets have created a new incentive for users to artificially bot streams on Spotify to win financial bets.
Quotes
“He was running a series of urgent care clinics in North Carolina. Like, he wasn't in the music industry at all.”
Unnamed speaker · 5:57 “The thing that they got him for, like the, the streamers do prohibit artificial like stream inflation. That doesn't mean, it still happens all the time.”
Unnamed speaker · 20:37 “I think it was likely that he thought it was less risky to sort of diffuse the amount of bodied streams amongst like hundreds of thousands of AI songs.”
Unnamed speaker · 27:23
Sponsored segments
- AWS AI 0:00–1:13
About this episode
A man named Mike Smith was recently sentenced to 18 months in prison, and a fine in excess of $8 million, for creating an AI system that faked billions of streams and earned him millions in royalties. Wired's Kate Knibbs explains how Smith pulled it off, how he got caught, and what this case means for the internet's growing slop problems. Vote for us in the Signal Awards! Vote Vergecast: Best Technology Podcast Vote Version History: Best History Podcast Vote Decoder: Best Business Podcast Further reading: Apple’s HomeView ad is confusing to everyone except parents | The Verge Ocarina of Time’s Switch 2 remake feels modern — and terrifying | The Verge We might not have to wait 13 years for the next GTA | The Verge Epic is bringing Fortnite to Linux | The Verge JPMorgan Chase is keeping AI agents out. | The Verge Wired: Spotify Confirms Streaming Fraud After Kalshi Trader Cries Foul Subscribe to The Verge for unlimited access to theverge.com, subscriber-exclusive newsletters, and our ad-free podcast feed. We love hearing from you! Email your questions and thoughts to [email protected] or call us at 866-VERGE11. Learn more about your ad choices. Visit podcastchoices.com/adchoices
Transcript
7,348 words · 6 speakers
Topics
- Spotify
- Apple
- Suno
- GitHub Copilot
- MCP
- DistroKid
- Claude
- Cursor
- GTA 6
- Rockstar
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