U.S. Government Investigates Streaming Fraud Involving Bots and AI-Generated Music

The U.S. Copyright Office has launched an official inquiry into music streaming fraud, examining how fake streams, automated bots, and AI-generated music are being used to manipulate royalty payments. Announced on October 7, 2026, the initiative follows concerns from lawmakers about fraudulent streaming activity and its financial impact on legitimate artists and record labels.

The investigation comes shortly after a major streaming fraud case involving Michael Smith, a North Carolina resident who was sentenced to 18 months in federal prison. Between 2017 and 2024, Smith used hundreds of thousands of AI-generated tracks and thousands of automated bot accounts to generate billions of fake streams, fraudulently collecting more than $8 million in royalties.

Streaming fraud has become a growing concern across the music industry, particularly for independent artists and electronic music producers who rely on digital platforms to reach listeners. Artificial streams can distort streaming numbers and divert royalty payments away from legitimate creators. As AI-generated music becomes increasingly accessible, platforms face additional challenges in identifying fraudulent activity and protecting their royalty systems.

The Copyright Office is now gathering information from artists, independent labels, distributors, and streaming services about fraud detection, royalty manipulation, and potential solutions. The inquiry will examine existing prevention measures and whether additional industry standards or regulatory action may be necessary.

Artists and labels have until November 23, 2026, to submit initial comments, with reply comments closing on December 21. The findings could help inform future efforts to address streaming fraud and improve transparency across the music industry.