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    Home - Startups - ‘A Billion Streams and No Fans’: Inside a $10 Million AI Music Fraud Case
    Startups

    ‘A Billion Streams and No Fans’: Inside a $10 Million AI Music Fraud Case

    TechurzBy TechurzMay 20, 2025No Comments4 Mins Read
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    ‘A Billion Streams and No Fans’: Inside a $10 Million AI Music Fraud Case
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    Almost no one hits it big in music. The odds are so bad it’s criminal. But on a late spring evening in Louisville, Kentucky, Mike Smith and Jonathan Hay were having that rare golden moment when everything clicks. Smith was on guitar. Hay was fiddling with the drum machine and keyboard. Dudes were grooving. Holed up in Hay’s living room, surrounded by chordophones and production gizmos, the two musicians were hoping that their first album as a jazz duo would finally win them the attention they’d been chasing for years.

    It was 2017. The men, then in their forties, were longtime collaborators and business partners—though they made an odd couple. Smith owned a string of medical clinics and wore tight shirts over his meticulously maintained muscles. He lived in a sprawling house in the suburbs of Charlotte, North Carolina, with his wife and six kids. He’d judged on a reality TV show and written a self-help book. Hay—larger, softer, comfy in sweatsuits and Crocs—lived in an apartment and was dating a stripper. He loved weed. He’d hustled as a music publicist for years; by reputation he was best known in the industry for promoting a nuclear rumor that Rihanna had hooked up with Jay-Z. He’d recently, on an impulse, had sleeves tattooed on his arms. To avoid annoying his health-nut friend, he’d sneak into his bedroom to vape.

    Michael Smith and Jonathan Hay were longtime collaborators and something of an odd couple.

    Photograph: Jonathan Hay; Getty Images

    Smith and Hay finished their album and called it Jazz. That fall, they released it on all the usual places—Spotify, Apple Music, Tidal—and as a physical album. Alas, it failed to take off. Smith and Hay weren’t total nobodies; a few songs they had coproduced for other artists years earlier had gotten some buzz. So the two men decided to retool Jazz and release an updated version, adding new songs.

    Jazz (Deluxe) came out in January 2018. Right away, it shot up the Billboard chart and hit No. 1. Hay was elated. At last, real, measurable success had arrived.

    Then, just as suddenly, the album disappeared from the ranking. “Nobody drops off the next week to zero,” says Hay, remembering his confusion. He called other artists to ask if they’d ever seen this before. They hadn’t. Questions piled up. If so many people had listened, why did they suddenly stop? He scanned the internet for chatter. Even a single freaking tweet would have been nice. Nada. Where were the fans? “No one’s talking about the music,” Hay realized.

    Pulling up Spotify’s dashboard for artists, Hay scrutinized the analytics for the pair’s work. Listeners appeared concentrated in far-flung places like Vietnam. Things only got stranger from there. Here’s how Hay remembers it: He started receiving notices from distributors, the companies that handle the licensing of indie artists’ music. The distributors were flagging Smith and Hay’s music, from Jazz and from other projects, for streaming fraud and pulling it down. Smith told Hay it was a mistake and that Hay had messed up securing the proper rights for samples. Hay frantically tried to correct the issue, but the flagging persisted.

    Hay, panicking, badgered Smith to help him figure out what was happening. Finally, Hay says, Smith offered some answers: Smith had instructed his staff at the medical clinics to stream their songs. It didn’t sound like the full story.

    Then, last September, Smith turned up at the heart of another music streaming incident, this one rather epic. The FBI arrested him and charged him in the first AI streaming fraud case in the United States. The government claims that between 2017 and 2024, Smith made over $10 million in royalties by using bot armies to continuously play AI-generated tracks on streaming platforms. Smith pleaded not guilty to all charges. (Through his lawyer, Smith declined to be interviewed, so this is very much Hay’s side of the story, corroborated by numerous interviews with people who worked with the two men.)

    billion Case FANS Fraud Million music streams
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